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What  the  Railway  Mail  Pay 

Problem  Means  to 

the  Railroads 


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I.   Introduction. 

II.   A  review  of  events  follow^ing 
the  inquiry  of  1909. 

III.  The  situation  which  the  rail- 

roads are  now  facing. 

IV.  Recommendations  of  the  Com- 

mittee on  Railway  Mail  Pay. 

V.  The  present  law  and  proposed 
legislation. 

VI.  Chronology  of  the  laws,  prac- 
tices and  inquiries  affecting 
railway  mail  pay. 


A  Statement  Presented  to 
the  Chief  Executives  of  the  Railroads  by  the 

COMMITTEE  ON   RAILWAY  MAIL  PAY 


Republished  June  15,  1915,  with  resolutions  adopted  at  a 

conference  of  Railroad  Executives  held  May  20,  1915, 

at  New  York  City 


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6 

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Committee  on  Railway  Mail  Pay 

75  Church  Street,  New  York  City 


RALPH   PETERS   (Chairman) 
President,  Long  Island  Railroad 

CHARLES  A.  WICKERSHAM 
President  and  General  Manager,  Western  Railway  of  Alabama 

W.  W.  BALDWIN 

Vice-President,  Chicago,  Burlington  tBi.  Quincy  Railroad 

W.  W.  ATTERBURY 

Vice-President,  Pennsylvania  Railroad 

E.  J.  PEARSON 

First  Vice-President,  Texas  CS,  Paciiic  Railway 

E.  G.  BUCKLAND 

Vice-President,  New  York,  New  Haven  CBi,  Hartford  Railroad 

C.  F.  DALY 

Vice-President,  New  York  Central  Lines 

W.  A.  WbrcTHiNGTON 

Vice-f*r.e§icl«nt  -and  Aosic.tant  -to  Chairman, 
•'. .   -  .  .*  -Soatbtfrh;  l^ficispc  Copipany 

EDWARD    CHAMBERS 
Vice-President,  Atchison,  Topeka  (TS,  Santa  Fe  Railway 

W.  F.  ALLEN,  Secretary 


.JX, 


i' 


Contents 


Pages 

I.  Introduction  (with  Resolutions)       ....         5-6 
II.  A  Review  of  Events  Following  the  Inquiry  of  1909       7-12 

Appearance  of  Document  No.  105,  page  8;  The  Joint 
Congressional  Committee's  report,  page  9;  Introduction  of 
the  Moon  bill,  page  9  ;  Protest  of  the  "  short  lines,"  page  10 ; 
Moon      rider"  fails  to  pass,  page  11. 

III.  The    Situation    Which   the   Railroads    Are    Now 

Facing 13-30 

What  disinterested  inquiries  have  shown,  page  13 ;  Half  the 
parcel  post  now  carried  without  pay,  page  14  ;  Expansion 
in  scope  of  parcel  post,  page  15;  Increased  traffic  not  paid 
for,  page  16;  Facts  of  underpayment  summarized,  page  17; 
Graver  situation  possible  under  Moon  bill,  page  17;  How 
the  Moon  bill  would  operate,  page  18;  Discretionary  fea- 
tures of  the  Moon  bill,  page  19;  Supplementary  provisions 
of  the  Moon  bill,  page  19  ;  Service  compulsory  under  Moon 
bill,  page  20;  One  cent  per  ton  per  mile  for  parcel  post, 
page  21 ;  Space  plan  disregards  basic  rate  principle,  page  22  ; 
Flexibility  of  space  plan  not  reciprocal,  page  23;  Some  im- 
portant distinctions  as  to  car  space,  page  24 ;  Governmental 
competition  vs.  regulation,  page  24;  What  does  public 
sentiment  favor?  page  25;  What  the  Joint  Congressional 
Committee  held,  page  26  ;  Mail  and  express  earnings  of  the 
railroads,  page  27;  The  right  to  a  commercial  profit  from 
mail  traffic,  page  28  ;  The  Joint  Congressional  Committee's 
bill,  page  29 ;  Reference  to  Interstate  Commerce  Com- 
mission, page  29. 

IV.  Recommendations  of  the  Committee  on  Railway 

Mail  Pay 31-36 

Weight  system  of  pay  fundamentally  sound,  page  31  ;  Sci- 
entific structure  of  present  rate  system,  page  32;  Car  space 
not  a  gauge  of  service  rendered,  page  33;  Opinion  vs.  ser- 
vice as  a  basis  of  pay,  page  34;  Defects  of  the  present  prac- 
tice, page  35  ;  The  remedies  suggested,  page  36. 


Contents  — (Continued) 

Pages 

V.    The  Present  Law  and  Proposed  Legislation  .         .     37-63 

Summary  of  the  present  law,  page  37;  Present  weight  rates 
page  39;  Amendment  recommended  by  Committee  on  Rail- 
way Mail  Pay,  page  40 ;  Joint  Congressional  Committee's 
bill,  page  41 ;  Moon,  or  Post  Office  Department,  bill,  page 
46;  Moon,  or  Post  Office  Department,  bill,  as  amended  by 
House  and  Senate  conferrees,  page  54;  Comments  upon 
the  Moon  bill,  page  61. 

VL    Chronology  of  the  Laws,  Practices  and  Inquiries 

Affecting  Railway  Mail  Pay        ....     64-67 


I 
INTRODUCTION 

4T  a  meeting  of  Railroad  Executives,  representing  approxi- 
J_\  mately  90  per  cent,  of  the  entire  mileage  of  the  country, 
J~\.  held  May  20,  1915,  at  New  York  City,  the  question  of 
the  compensation  paid  the  railroads  for  carrying  the  United 
States  Mails  was  fully  discussed,  after  which  the  following  reso 
lutions  were  unanimously  adopted : 

''Resolved,  That  the  position  of  the  Committee  on 
Railway  Mail  Pay  has  the  approval  of  the  representatives 
of  the  railroads  present  at  this  meeting,  and  that  the  rail- 
ways of  the  United  States  continue  to  give  their  united 
support  to  the  Committee  in  its  efforts  to  secure  to  the 
railways  adequate  compensation  for  transporting  the  mails. 

''Resolved,  further,  That  we  believe  the  so-called  space 
basis  as  proposed  in  the  last  Congress  is  w^rong,  and  sus- 
ceptible in  practice  of  grave  injustice  to  the  railways  in 
denying  payment  for  services  rendered. 

"Resolved,  further,  That  we  endorse  the  views  of  the 
Committee  on  the  superiority  of  the  existing  weight  basis, 
amended  by  annual  w^eighing,  payment  for  apartment  cars 
and  payment  for,  or  release  from,  side  or  terminal  messen- 
ger service. 

"Resolved,  further.  That  the  Committee  on  Railway 
Mail  Pay  is  urged  to  continue  its  work  on  this  basis,  and 
to  ask  Congress  to  enact  a  law  that  will  give  the  Interstate 
Commerce  Commission  the  same  jurisdiction  over  the 
mail  traffic  that  it  now  has  over  all  other  traffic  of  the 
railroads.** 

Mr.  Howard  Elliott,  President  of  the  New  York,  New 
Haven  and  Hartford  Railroad  Company,  acted  as  chairman  of 
the  conference.     Other  Railroad  Executives  present  were  : 

Mr,  A.  H.  Smith,  President,  New  Yoric  Central  Lines;  Mr.  Samuel  Rea, 
President,  Pennsylvania  Railroad  System;  Mr.  L.  E.  Johnson,  President,  Nor- 
folk and  Western  Railway;  Mr.W.  H.Truesdale,  President,  Delaware,  Lacka- 
wanna and  Western  Railroad  ;  Mr.  George  W.  Stevens,  President,  Chesapeake 
and  Ohio  Railway;  Mr.  E.  F.  Kearney,  President, Wabash  Railroad  ;  Mr.  S.  M. 
Felton,  President,  Chicago  Great  Western  Railroad;  Mr.  Walker  D.  Hines, 
Chairman   Executive   Committee,  Atchison,  Topeka   and   Santa  Fe  Railway  ; 


Mr.  W.  L.  Pa'-k.  Vice'-Pre^ideht^  Ilfinoj'^  Central  Railroad;  Mr.  N.  D.  Maher, 
Vice-President,  Norfolk  and  Western  Railway;  Mr.  E.  H.  Coapman, 
Vice-President  and  General  Manager,  Southern  Railway;  Mr.  A.  C. 
Needles,  General  Manager,  Norfolk  and  Western  Railway ;  Mr.  G.  F. 
Brownell,  Vice-President,  Erie  Railroad  ;  Pvlr.  G.  E.  Evans,  Vice-President, 
Louisville  and  Nashville  Railroad  ;  Mr.  R.  S.  Logan,  Vice-President,  Grand 
Trunk  Railway;  Mr.  Benjamin  Campbell,  Vice-President,  New  York,  New 
Haven  and  Hartford  Railroad  ;  Mr.  J.  H.  Hustis,  President,  Boston  and  Maine 
Railroad  ;  Mr.  R.  H.  Aishton,  Vice-President,  Chicago  and  Northwestern 
Railway;  Mr.  J.  A.  Middleton,  Vice-President,  Lehigh  Valley  Railroad;  Mr. 
G.  M.  Shriver,  Second  Vice-President,  Baltimore  and  Ohio  Railroad  ;  Mr. 
W.  W.  Baldwin,  Vice-President,  Chicago,  Burlington  and  Quincy  Railroad; 
Mr.  J.  M.  Gruber,  Vice-President,  Great  Northern  Railway;  Mr.  A.  W. 
Johnston,  General  Manager,  New  York,  Chicago  and  St.  Louis  Railroad; 
Mr.  Robert  Frazer,  President,  Bellefonte  Central  Railroad  ;  Mr.  J.  W.  Higgins, 
General  Manager,  Missouri  Pacific  Railway;  Mr.  M.J.  C.  Wrenne,  Superin- 
tendent Transportation,  Nashville,  Chattanooga  and  St.  Louis  Railway;  Mr. 
H.  E.  Huntington,  General  Passenger  Agent,  Buffalo,  Rochester  and  Pitts- 
burgh Railway;  Mr.  W.  D.  Duke,  Assistant  to  President,  Richmond,  Fred- 
ericksburg and  Potomac  Railroad ;  Mr.  Moultrie  Hitt,  Secretary  General 
Managers'  Association  of  the  Southeast;  Mr.  J.  R.  Kearney,  General  Superin- 
tendent Transportation,  Baltimore  and  Ohio  Railroad  and  Cincinnati,  Hamilton 
and  Dayton  Railway;  Mr.  P.  R.  Albright,  Assistant  General  Manager,  Atlantic 
Coast  Line  Railroad;  Mr.  W.  P.  Stoughton,  Manager  Mail  Traffic,  Chicago 
and  Northwestern  Railway;  Mr.  J.  C.  McCahan,  Jr.,  Supervisor  Mail  Traffic, 
Baltimore  and  Ohio  Railroad  and  Cincinnati,  Hamilton  and  Dayton  Railway; 
Mr.  H.  L.  Fairfield,   Supervisor  Mail  Traffic,  Illinois  Central   Railroad;   Mr. 

D.  C.  Pettibone,  General  Agent  Mail  Traffic,  Northern  Pacific  Railway;  Mr. 
J.  P.  Connolly,  Supervisor  Mail  Traffic,  Central  Railroad  of  New  Jersey;  Mr. 
C.  A.  Searle,  Manager  Mail  Traffic,  Rock  Island  Lines;  Mr.  John  N.  Drake, 
Secretary,  Short  Line  Railroads  Association. 

Representing  the  Committee  on  Railway  Mail  Pay  the  fol- 
lowing were  in  attendance : 

Mr.  Ralph  Peters  (Chairman),  President,  Long  Island  Railroad  ;   Mr.  W. 
W.  Baldwin,  Vice-President,  Chicago,  Burlington  and  Quincy  Railroad;   Mr. 

E.  J.  Pearson,  First  Vice-President,  Texas  and  Pacific  Railway;  Mr.  C.  F. 
Daly,  Vice-President,  New  York  Central  Lines;  Mr.  W.  A.  Worthington, 
Vice-President,  Southern  Pacific  Company';  Mr.  E.  T.  Postlethwaite,  Assist- 
ant to  President,  Pennsylvania  Railroad  ;  Mr.  S.  C.  Scott,  Vice-Presidents' 
Assistant,  Pennsylvania  Lines;  Mr.  A.  H.  Rowan,  Assistant  to  Vice-President, 
New  York  Central  Lines;  Mr.  J.  P.  Lindsay,  Manager  Mail  Traffic,  Atchison, 
Topeka  and  Santa  Fe  Railway;  Mr.  H.  E.  Mack,  General  Manager  Mail 
Traffic,  Missouri  Pacific  Railway;  Mr.  V.  J.  Bradley,  General  Supervisor  Mail 
Traffic,  Pennsylvania  Railroad  ;  Mr.  W.  W.  Safford,  General  Mail  Agent, 
Seaboard  Air  Line  Railway. 

The  facts  laid  before  the  Executives,  and  discussed  at  the 
conference,  are  set  forth  in  the  following  pages : 


II 

A  Review  of  Events  Following  the 
Inquiry  of  1909 

The  Committee  on  Railway  Mail  Pay,  today  representing 
270  railroad  companies,  operating  223,021  miles  of  line  in  the 
United  States,  was  originally  formed  to  aid  in  preparing  and 
compiling  information  asked  for  by  the  Post  Office  Depart- 
ment, in  1909,  to  ascertain  the  cost  of  carrying  the  mails. 

This  inquiry  was  undertaken  in  compliance  with  an  act  of 
Congress  passed  March  3,  1879,  empowering  the  Postmaster 
General  to  request  such  information. 

Conferences  were  held  with  the  officials  of  the  Post  Office 
Department  to  devise  a  practical  system  of  blanks  that  would 
secure  the  information  desired,  on  uniform  lines.  In  addition 
to  assisting  the  officials  of  the  Post  Office  Department  in 
obtaining  the  information  on  a  uniform  basis,  the  Committee 
offered  its  assistance  to  expedite  the  tabulation  and  analysis  of 
the  information.  This  offer  was  not  accepted,  as  the  Post 
Office  Department  preferred  to  deal  independently  with  the 
subject. 

The  Committee,  therefore,  made  its  own  tabulation  and 
analysis  from  such  original  reports  as  were  in  complete  form, 
covering  about  79  per  cent,  of  the  lines  reporting.  The  result 
of  that  tabulation  was  published  on  January  6,  1911,  in  the 
Preliminary  Report  of  the  Committee,  treating,  especially, 
of  the  relative  earnings  per  car-foot-mile '^'  of  the  mail,  express, 
and  passenger  services. 

It  was  shown,  in  this  preliminary  report,  that  the  average 
earnings  per  car-foot-mile,  from  the  mail  service,  were  3.228 
mills ;  from  the  passenger  service,  4.417  mills ;  from  the 
express  service,  3.855  mills.  Thus  the  earnings  per  car-mile 
(60-foot  car)  were  found  to  be  19.37  cents  from  mail  traffic;  26.50 
cents  from  passenger  traffic ;  23.13  cents  from  express  traffic. 

*  A  car-foot-mile  is  a  transportation  unit,  meaning  the  movement  of  a  linear  foot  of 
car  space  over  the  distance  of  one  mile. 


In  other  words,  on  the  basis  of  car  space  devoted  to  each 
service,  the  express  traffic  yielded  19  per  cent.,  and  the  passenger 
traffic  37  per  cent.,  greater  return  than  the  transportation  of  the 
United  States  mail. 

Appearance  of  Document  No.  105 

The  Post  Office  Department,  after  declining  the  offers  of 
the  Committee  on  Railway  Mail  Pay  to  co-operate  in  tabu- 
lating and  analyzing  the  information,  finally,  in  1911,  issued 
its  report,  known  as  Document  No.  105  of  the  62d  Congress, 
which  purported  to  show  that  the  railroads  were  overpaid  about 
$9,000,000  per  year  for  transporting  the  mails.  This  conclusion 
was  reached  by  the  use  of  a  method  of  allocating  costs,  devised  in 
the  Department,  and  not  sanctioned  by  any  recognized  authority 
on  transportation  economics;  and,  further,  by  rejecting  much  car 
space  incident  to  the  mails  and  allotting  it  to  the  passenger  service; 
also  by  rejecting  **  deadhead  "  space  in  mail  cars  and  apartments. 

No  allowance,  whatever,  was  made  for  earning  a  return 
upon  the  property  of  the  railroads  devoted  to  the  postal  service. 

On  the  issuance  of  Document  No.  105,  a  vigorous  protest 
was  made  to  the  Speaker  of  the  House  of  Representatives,  and 
to  the  Members  of  Congress,  by  the  Chairman  of  the  Commit- 
tee on  Railway  Mail  Pay.  As  a  result  of  this  protest,  the  follow- 
ing special  Joint  Committee  of  Congress  was  appointed  in  1912: 
Hon.  Jonathan  Bourne,  Jr.,  Senator  from  Oregon,  Chairman; 
Hon.  Harry  A.  Richardson,  Senator  from  Delaware ;  Hon.  John 
H.  Bankhead,  Senator  from  Alabama ;  Hon.  James  T.  Lloyd, 
Representative  from  Missouri;  Hon.  William  E.  Tuttle,  Jr., 
Representative  from  New  Jersey  ;  Hon.  John  W.  Weeks,  Rep- 
resentative from  Massachusetts.  On  January  14,  1913,  Mr. 
Weeks  was  elected  a  member  of  the  Senate. 

This  Joint  Congressional  Committee  began  its  work  in  Janu- 
ary, 1913,  holding  hearings  in  Washington,  at  which  the  Com- 
mittee on  Railway  Mail  Pay  presented  the  case  for  the  railroads, 
and  the  officials  of  the  Post  Office  Department  presented  the  case 
for  the  Government.  The  investigation  extended  over  a  period 
of  eighteen  months,  and  was  the  most  thorough  and  complete 
inquiry  into  the  mail  pay  question  that  has  ever  been  made. 


The  Joint  Congressional  Committee's  Report 

As  a  result  of  this  investigation,  the  Joint  Congressional 
Committee  submitted  its  report  on  August  31,  1914,  recom- 
mending legislation  which  was  unquestionably  intended,  in 
good  faith,  to  give  the  railroads  a  more  adequate  compensation 
for  carrying  the  mails  and  to  relieve  them,  in  measurable 
degree,  from  some  of  the  burdensome  conditions  of  the  service 
of  which  they  had  long  complained.  The  report  disposed 
effectively  of  the  allegations  of  overpayment  and  completely 
vindicated  the  position  taken  by  the  railroads  with  respect  to 
all  issues  of  fact. 

The  bill  which  the  Joint  Committee  introduced,  however, 
failed  in  many  important  respects  to  commend  itself,  as  a  re- 
medial measure,  to  those  railroad  officers  who  made  a  careful 
study  of  its  terms.  It  adopts  a  pure  space  plan  of  payment, 
rejecting  weight  altogether  in  its  scheme  of  rates ;  and  its 
operation  would  be  wholly  experimental  and  the  results  ex- 
tremely problematical.  Inasmuch  as  all  of  the  reforms  which 
this  bill  proposed  to  effect  could  be  brought  about  with  ease 
and  certainty  by  a  few  simple  amendments  to  the  existing  law, 
the  Committee  on  Railway  Mail  Pay  does  not  perceive  the  need 
or  justification  for  a  legislative  experiment  the  results  of  which 
might  be  very  serious. 

Introduction  of  the  Moon  Bill 

On  June  4,  1914,  after  the  Joint  Congressional  Committee 
had  concluded  its  investigation,  but  before  its  report  had  been 
completed,  Representative  Moon,  of  Tennessee,  Chairman  of 
the  House  of  Representatives'  Post  Office  Committee,  intro- 
duced a  railway  mail  pay  bill  which  has  become  commonly 
associated  with  his  name.  It  is  a  matter  of  general  knowledge, 
and,  indeed,  is  frankly  conceded  by  the  Postmaster  General,  that 
the  Moon  bill  represents  the  views  of  his  Department  concerning 
the  question  of  readjusting  the  compensation  for  the  railway 
mail  service,  and  particularly  the  Department's  conception  of 
the  space  basis  of  payment. 

The  Moon  bill,  in  marked  contrast  to  the  Joint  Committee 
bill,  made  the  rates  of  pay,  and  all  the  conditions  of  the  service 


which  the  railroads  might  be  called  upon  to  furnish,  subject  to 
the  control  and  deterniination  of  the  Postmaster  General. 

Both  the  Moon  bill  and  the  Joint  Committee  bill  made 
the  service  compulsory,  under  penalty  of  $5000  per  day  for  re- 
fusal, but  the  Joint  Committee  bill  made  the  rates  of  pay  and 
conditions  of  service  specific,  whereas,  under  the  Moon  bill,  the 
Postmaster  General  could  vary  either  or  both,  at  his  discretion. 

The  Moon  bill  was  passed  by  the  House  and  sent  to  the 
Senate,  where  it  was  referred  to  the  Senate  Post  Office  Com- 
mittee. The  Joint  Committee  bill  was  introduced  in  the 
Senate  and  was  also  referred  to  the  Post  Office  Committee. 

The  last  session  of  Congress,  it  will  be  recalled,  was 
chiefly  occupied  with  consideration  of  matters  of  the  greatest 
general  importance,  both  nationally  and  internationally,  notably 
the  shipping  bill  and  the  situation  created  by  the  European 
war.  No  further  action  was  taken  on  railway  mail  pay,  after 
the  two  bills  reached  the  Senate  Committee,  until  December  14, 
1914,  when  the  House  Post  Office  Committee,  under  the  chair- 
manship of  Mr.  Moon,  framed  the  Post  Office  appropriation  bill 
for  the  fiscal  year  1915-16  and  attached  to  it  the  Moon  bill  as  a 
rider.  The  appropriation  bill  was  passed  in  this  form  by  the  House. 

Protest  of  the  ''Short  Lines" 

The  Senate  Committee  had  previously  given  the  railroads 
a  hearing  in  protest  against  the  Moon  bill  and  the  space  basis 
of  pay  in  general,  and  in  January,  1915,  granted  a  second  hear- 
ing, especially  for  the  "short  line"  companies. 

The  ** short  lines"  are  the  small  railroads,  having  for  the 
most  part  less  than  100  miles  of  line,  which  are  not  part  of,  or 
affiliated  with,  any  of  the  larger  systems.  As  a  class,  they  have 
not  been  paying  enterprises.  The  majority  of  them  traverse 
sparsely  settled  sections,  where  traffic  is  limited.  In  numerous 
cases  they  have  been  run  into  mountainous  territory  where  both 
construction  and  operation  have  been  extremely  expensive. 
Many  of  them  have  been  operated  under  receiverships  for 
years.  Only  a  very  small  percentage  of  them  pay,  or  ever  have 
paid,  dividends.  Yet  the  service  they  render  is  indispensable  to 
the  people  of  the  sections  they  serve. 

At  the  Senate   hearings,   representatives  of    these  "short 

10 


lines,"  of  which  there  are  about  760  in  the  country,  registered 
most  earnest  pleas  against  enactment  of  the  Moon  bill  on  the 
ground  that  its  passage  would  mean  complete  ruin  for  many  of 
the  small  companies,  to  which  the  mail  service,  and  the  diversion 
of  freight  andexpress  traffic  to  the  parcel  post,are  matters  of  much 
greater  relative  importance  than  they  are  to  the  larger  companies. 

Their  testimony  disclosed  many  instances  of  the  shipment 
by  the  public  of  carloads  of  groceries,  tons  of  coal,  etc.,  divided 
up  into  50-pound  lots,  and  sent  by  parcel  post  because  the  post- 
age rates  were  lower  than  the  combined  rail  and  stage  freight 
rates  between  the  same  points.  In  many  of  these  instances  the 
stage  haul  alone  cost  the  Post  Office  Department  more  than  the 
entire  postage  collected  from  the  sender,  so  that  the  Govern- 
ment as  well  as  the  railroads  lost  heavily  because  of  the  inade- 
quate postage  rates. 

The  "short  line"  representatives  unanimously  asked  that 
weight  of  mail  carried,  determined  not  less  frequently  than  once  a  year^ 
be  retained  as  the  basis  of  payment  for  the  transportation  of 
the  mails. 

Moon  "Rider''  Fails  to  Pass 

The  Senate  amended  the  Post  Office  appropriation  bill  by 
eliminating  the  Moon  rider. 

A  deadlock  followed  between  the  House  and  Senate  con- 
ferrees,  the  former  insisting  upon  the  retention  of  the  rider  and 
the  latter  upon  its  omission.  Finally,  in  the  closing  hours  of 
the  last  day  of  the  session,  March  4,  1915,  while  the  appropria- 
tion bill  was  in  conference,  an  agreement  was  reached  by  the 
conferrees,  restoring  the  Moon  rider,  but  adopting  some  of  the 
rates  and  provisions  recommended  by  the  Joint  Congressional 
Committee,  and  also  providing  for  reference  of  the  adequacy 
of  the  space  rates  to  the  Interstate  Commerce  Commission, 
after  the  lapse  of  one  year,  upon  petition  of  the  Post  Office 
Department  or  of  51  per  cent,  of  the  railroads. 

The  appropriation  bill,  so  amended,  was  again  passed  by  the 
House,  but  was  not  considered  by  the  Senate.  In  consequence, 
the  Post  Office  appropriation  bill  and  the  Moon  rider  failed  of 
passage,  and  it  was  necessary  to  adopt  a  joint  resolution  of  the 

11 


Senate  and  House,  continuing,  for  the  next  fiscal  year,  the 
Post  Office  appropriations  of  the  current  year. 

Tliese  developments  have  thrown  the  whole  question  of 
railway  mail  pay  over  to  the  new  Congress,  the  regular  session  of 
which  will  commence  on  the  first  Monday  in  December,  1915. 

The  Postmaster  General  has  announced  his  intention  of 
having  the  Moon  bill  reintroduced  in  the  new  Congress  and  of 
bringing  every  effort  to  bear  to  achieve  its  enactment. 


12 


Ill 

The  Situation  Which  the  Railroads 
Are  Now  Facing 

Since  the  basic  law  at  present  governing  the  compensation 
of  the  railroads  for  carrying  the  mails  was  passed,  in  1873,  the 
rates  of  pay  have  been  four  times  reduced — three  times  by  act 
of  Congress  and  once  by  an  executive  order  of  the  Postmaster 
General,  which  is  now  in  litigation  before  the  Supreme  Court 
of  the  United  States,  in  the  ''divisor  case."  The  divisor  order, 
alone,  has  deprived  the  railroads  of  more  than  $35,000,000 
since  its  application  in  1907. 

In  consequence  of  these  successive  reductions,  the  present 
scale  of  rates  applicable  to  mail  routes  of  various  densities  of 
traffic  is  about  30  per  cent,  lower  than  the  rate  scale  established 
by  the  basic  law.  A  much  greater  reduction  in  the  rates 
of  pay  has  been  effected  automatically  by  the  principle  em- 
bodied in  the  law  of  1873,  which  entitles  the  Post  OfHce  De- 
partment to  a  lower  rate  per  ton-mile,  as  the  average  daily 
weight  of  mail  increases. 

The  combined  effect  of  the  cuts  in  rate  scales  and  the  in- 
creasing density  of  the  traffic  has  been  to  reduce  the  average 
rate  received  for  hauling  a  ton  of  mail  one  mile  from  more 
than  26  cents,  in  1873,  to  less  than  10  cents  at  the  present  time. 

Considering  the  extraordinary  character  of  the  railway 
mail  service,  utilizing,  as  it  does,  every  fast  passenger  train,  as 
well  as  special  trains,  and  considering,  also,  the  numerous  sup- 
plementary facilities  and  incidental  services  which  the  railroads 
are  obliged  to  render  the  Post  Office  Department,  railroad 
managers  entertain  no  doubt  that  the  present  average  scale  of 
compensation  is  decidedly  inadequate. 

What  Disinterested  Inquiries  Have  Shown 

This  opinion  is  sustained  by  the  decision  of  the  Joint 
Congressional  Committee,  which,  in  its  report  of  August  31, 
1914,  recommended  a  substantial  increase  in  compensation  to 

13 


the  railroads,  and  relief  from  some  of  the  more  burdensome  of 
the  incidental  services. 

Further  important  support  to  the  contention  of  under- 
payment is  afforded  by  the  report  of  Mr.  Louis  D.  Brandeis 
to  the  Interstate  Commerce  Commission,  while  acting  as  the 
Commission's  Special  Counsel  in  the  Advance  Freight  Rate 
Case.  Mr.  Brandeis,  in  May,  1914,  announced  to  the  Com- 
mission : 

"  It  seems  clear  that  the  railw^ay  mail  service  is  at  present 
unremunerative  to  the  carriers." 

In  1913,  Dr.  M.  O.  Lorenz,  Associate  Statistician  of  the 
Interstate  Commerce  Commission,  calculated  that  the  railroads 
had  been  underpaid  certainly  more  than  $5,000,000  per  year 
for  carrying  the  mails,  even  before  the  establishment  of  the  par- 
cel post,  which  has  since  greatly  increased  the  underpayment. 

The  Wolcott-Loud  Congressional  Commission,  in  1901, 
reached  the  following  conclusion : 

**  We  are  of  the  opinion  that  the  prices  now  paid  to  the 
railroad  companies  for  the  transportation  of  the  mails  are  not 
excessive,  and  recommend  that  no  reduction  thereof  be  made." 

These  in vesti stations  and  reports,  above  enumerated,  are  the 
only  ones  that  have  been  made  by  disinterested  authorities  in 
the  last  15  years.  It  will  be  noted  that  in  three  instances  the 
railroads  were  held  to  be  underpaid,  and  in  the  other  instance 
(the  Wolcott-Loud  report  of  14  years  ago)  at  least  not  overpaid. 

Notwithstanding  the  definite  recommendation  of  the 
Wolcott-Loud  Commission,  in  1901,  against  reduction  of  the 
rates,  Congress,  in  1907,  without  investigation,  reduced  the  rates 
by  law,  and  in  the  same  year  the  Postmaster  General  made 
another  reduction  by  the  **  divisor  order,"  previously  referred  to. 

Half  the  Parcel  Post  Now  Carried  Without  Pay 

The  establishment  of  the  parcel  post,  on  January  1,  1913, 
introduced  a  new  element  into  the  situation.  Owing  to  lack  of 
adequate  provisions  for  paying  the  railroads  for  the  large 
amount  of  additional  service  which  the  parcel  post  has  entailed, 
the  railroads  are  today,  at  the  close  of  the  fiscal  year  1914-15, 
nearly  two  and  one-half  years  after  the  establishment  of  the 

14 


service,  transporting  without  compensation  fully  50  per  cent,  of 
the  traffic,  estimated  by  the  Postmaster  General  to  have 
exceeded  a  total  of  800,000,000  packages  in  the  last  fiscal  year. 

When  the  parcel  post  service  was  inaugurated,  no  provision 
of  any  character  had  been  made  to  pay  the  railroads  for  the  new 
traffic.  In  consequence,  the  railroads  carried  the  entire  parcel 
post  for  the  first  six  months  without  one  cent  of  remuneration. 

Beginning  with  July  1,  1913,  the  railroads  in  the  States  of 
New  York,  New  Jersey,  Pennsylvania,  Delaware,  Maryland, 
West  Virginia  and  Virginia  received  an  adjustment  of  pay  based 
on  a  weighing  of  the  mails  conducted  during  the  preceding 
spring,  when  the  parcel  post  was  in  its  infancy  and  the  original 
weight  limit  of  11  pounds  per  parcel,  established  by  Congress, 
was  still  in  force. 

Effective  from  the  same  date,  railroads  in  all  of  the  other 
sections  of  the  country  were  given  certain  arbitrary  allowances 
which  the  Postmaster  General  had  been  authorized  to  award, 
in  his  personal  discretion.  In  no  case  were  these  allowances 
to  exceed  a  five  per  cent,  increase  in  the  annual  mail  pay  of  any 
railroad.  The  allowances,  as  actually  awarded,  averaged  from 
three  to  four  per  cent. 

Expansion  in  Scope  of  Parcel  Post 

On  August  15,  1913,  six  weeks  after  these  adjustments  of 
pay  had  been  made,  the  Postmaster  General  increased  the 
weight  limit  per  parcel  post  package  from  11  pounds  to  20 
pounds  in  the  local,  first  and  second  zones,  and  reduced  the 
rates  of  postage.  On  January  1,  1914,  the  Postmaster  General 
extended  the  20-pound  weight  limit  to  all  zones  and  increased 
the  limit  in  the  local,  first  and  second  zones  to  50  pounds.  At 
the  same  time,  another  reduction  in  postage  rates  was  made. 
On  March  16,  1914,  books  and  catalogues  were  admitted  to 
the  parcel  post,  with  the  result  that  an  immense  traffic  has  been 
created.  How  great  this  is  may  be  judged  by  the  fact  that  the 
Congressional  Committee  appointed  to  investigate  the  parcel 
post,  headed  by  Senator  Bristow,  of  Kansas,  reported  that  a 
single  mail  order  house  is  saving  $1,000,000  per  year  through 
shipping  its  catalogues  via  the  parcel  post. 

15 


Increased  Traffic  Not  Paid  For 

For  all  the  additional  traffic  which  has  been  created  by  the 
extension  of  the  parcel  post  beyond  the  original  limits  estab- 
lished by  Congress,  no  compensation  whatever  has  yet  been 
paid  to  any  railroads  save  those  in  the  far  Western  States,  which, 
commencing  July  1,  1914,  after  a  delay  of  a  year  and  a  half, 
received  an  increase  in  pay  to  correspond  with  the  results  of  a 
weighing  of  the  mails  on  their  lines  conducted  during  the 
spring  of  1914. 

These  are  the  only  railroads  in  the  United  States  which 
are  now  (June,  1915)  being  paid  for  the  parcel  post  with  any 
approximate  degree  of  justice,  yet  even  they  are  carrying  a 
year's  increase  without  compensation. 

The  railroads  in  New  York,  New  Jersey,  Pennsylvania, 
Delaware,  Maryland,  West  Virginia  and  Virginia,  which  carry 
the  heaviest  mail  traffic  in  the  country,  are  still  being  paid  for 
the  weight  of  parcel  post  carried  a  few  weeks  after  the  service 
was  inaugurated,  before  the  public  had  become  accustomed  to 
its  use  and  while  the  11 -pound  weight  limit  was  in  force. 

The  railroads  in  New  England  and  the  Central  West, 
where  population  is  dense  and  mail  traffic  heavy,  and  in  all  the 
Southern  States  lying  East  of  the  Mississippi,  have  not  as  yet 
received  any  readjustment  of  pay,  based  upon  actual  weighing, 
since  the  establishment  of  the  parcel  post,  two  and  one-half 
years  ago.  These  railroads  are  still  carrying  the  parcel  post 
without  payment  except  for  the  arbitrary  allowances  of  three 
to  four  per  cent,  previously  referred  to.* 

Whatever  claim  may  be  advanced  as  to  the  adequacy  of 
these  allowances,  as  gauged  by  the  volume  of  parcel  post  carried 
during  the  first  seven  and  one-half  months  of  its  existence, 
while  the  limitations  fixed  by  Congress  still  remained  undis- 
turbed, they  are  certainly  most  inadequate  when  applied  to  the 
greatly  expanded  parcel  post,  as  it  exists  today, with  nearly  two 
and  one-half  years*  growth  in  the  traffic. 

*  Beginning  with  July  1,  1915,  the  railroads  in  the  Central  West  will  be  entitled  to 
pay  on  the  basis  of  a  weighing  of  the  mails  which  was  conducted  in  their  territory  during 
the  spring  of  the  current  year  (1915). 

16 


Facts  of  Underpayment  Summarized 

To  sum  up  the  parcel  post  situation  existinsa:at  the  date  of 
issue  of  this  statement,  and  throughout  the  entire  fiscal  year 
ending  June  30,  1915: 

1.  In  about  half  of  the  country  there  has  been  no  read- 
justment of  railway  mail  pay,  based  upon  actual  weighings, 
since  the  establishment  of  the  parcel  post  service. 

2.  In  about  three-quarters  of  the  country,  including  the 
portions  where  mail  traffic  is  heaviest,  there  has  been  no  com- 
pensation whatever  to  any  railroad  for  the  additional  traffic 
created  by  the  great  expansion  in  the  scope  of  the  parcel  post 
beyond  the  limits  originally  set  by  Congress,  as  to  weights  and 
rates  of  postage. 

3.  The  increase  in  the  parcel  post,  according  to  the  Post- 
master General's  own  figures,  has  been  and  still  is,  very  rapid, 
the  traffic  having  reached,  in  two  years'  time,  a  volume  of 
probably  1,000,000,000  packages  annually,  while  the  mails  are 
weighed  and  the  pay  of  the  railroads  readjusted  only  at  four- 
year  intervals. 

Taking  a  broad  view  of  this  situation,  the  Committee  on 
Railway  Mail  Pay  is  of  the  opinion  that  the  estimate  that  at 
least  50  per  cent,  of  the  parcel  post  has  been  carried  by  the 
railroads,  throughout  the  current  fiscal  year,  without  payment, 
is  very  conservative. 

Graver  Situation  Possible  Under  Moon  Bill 

Serious  as  the  present  situation  is  with  respect  to  the 
underpayment  for  the  parcel  post,  it  is  the  conviction  of  the 
Committee  on  Railway  Mail  Pay  that,  should  the  efforts  to 
obtain  enactment  of  the  Moon  bill  meet  with  success  in  the 
new  Congress,  conditions  even  more  serious  would  arise. 

Passage  of  the  Moon  bill  would  place  in  the  hands  of  the 
Postmaster  General,  who,  as  far  as  the  railroads  are  concerned, 
is  the  shipper,  the  power  of  restricting,  to  any  extent  that  he 
might  see  fit,  the  compensation  to  be  paid  the  railroads  for 
carrying  the  mails,  and  especially  the  parcel  post.  It  would 
also  create  a  system  of  rates  so  constructed  as  to  permit  a  very 
large  further  expansion  of  the  parcel  post  without  payment,  by 

17 


the  Post  Office  Department,  for  the  additional  service  the  rail- 
roads would  be  obliged  to  render. 

While  the  Moon  bill  would  no  doubt  provide  a  means  by 
which  the  deficit  incurred  in  the  operations  of  the  Post  Office 
Department  could  be  reduced,  it  is  obvious  that  this  could 
only  be  accomplished  at  the  expense  of  the  railroads,  by  adding 
very  greatly  to  the  grievous  burdens  which  have  already  been 
placed  upon  them  through  the  present  non-payment  for  50  per 
cent,  or  more  of  the  parcel  post. 

Chairman  Moon  gave  a  clear  characterization  of  the  bill 
when  he  informed  the  House  of  Representatives,  in  debate,  on 
December  19,  1914,  that  under  this  measure  it  would  be 
possible  to  require  the  railroads  ^'  to  carry  all  your  parcel  post 
probably  without  any  additional  compensation  and  save  many  millions 
annually. " 

How  the  Moon  Bill  Would  Operate 

The  Moon  bill  would  have  accomplished  its  results  in 
two  ways : 

First,  by  establishing  the  "space  plan"  of  pay- 
ment, under  which  the  compensation  for  the  railway 
mail  service  would  be  based  primarily,  not  upon  the 
weight  of  mail  carried,  but  upon  the  amount  of  car 
space  authorized  by  the  Department  for  use  in  the 
service;  such  space  to  be  paid  for  at  car-mile  rates 
representing  much  less  than  the  earning  power  of  the 
space,  but  with  full  liberty  to  the  Department  to 
utilize  the  maximum  carrying  capacity  of  the  space 
so  authorized.  This  would  give  the  Department 
complete  control  of  the  facilities  of  the  railroads,  and, 
necessarily,  if  the  compensation  for  the  space  was 
inadequate  for  the  weight  of  mail  transported — that 
is,  for  the  actual  service  performed — partial  confis- 
cation of  the  facilities  of  the  railroads  would  be 
accomplished. 

Secondly,  by  making  the  rates  to  be  paid  for  the 
authorized  space  discretionary  with  the  Postmaster 
General.    The  bill  named  certain  rates  and  authorized 

18 


the  Postmaster  General  to  pay  "not  exceeding" 
those  rates.  This  would  permit  the  Postmaster 
General  to  reduce  the  rates  at  will. 

Discretionary  Features  of  the  Moon  Bill 

The  Moon  bill  would  also  confer  upon  the  Postmaster 
General  other  discretionary  powers  of  an  arbitrary  character 
which,  from  the  railroad  point  of  view,  can  only  be  regarded  as 
most  improper,  when  coupled  with  a  penal  provision  making  the 
service  compulsory. 

The  Postmaster  General  would  be  authorized  to  require 
the  railroads  to  furnish  mail  cars  and  apartments  of  any  design 
or  construction  that  he  might  specify,  regardless  of  cost  or  of 
the  financial  ability  of  various  companies  to  comply.  The  rail- 
roads would  have  no  assurance  as  to  the  length  of  time  such 
cars  would  be  used  and  paid  for.  On  the  contrary,  the  Post- 
master General,  under  the  terms  of  the  Moon  bill,  could  cancel 
the  authorizations  at  will,  even  after  specially  constructed  cars 
had  been  supplied. 

The  Postmaster  General  would  be  empowered  to  require 
the  railroads  to  furnish  such  station  space  and  rooms  at  terminals, 
rent  free,  as  he  might  specify ;  to  place  mail  cars  in  stations, 
prior  to  the  departure  of  trains,  for  the  advance  distribution  of 
mail,  whenever  desired;  and  to  perform,  or  not  to  perform, 
without  compensation,  under  his  personal  discretion,  the  services 
usually  designated  as  "side,  terminal  and  transfer  services." 

The  Moon  bill  would  compel  the  railroads  to  give  free 
transportation  to  all  officers  and  employes  of  the  Post  Office 
Department,  not  only  while  on  duty  in  connection  with  rail- 
way mail  service,  and  while  going  to  and  from  such  duty,  as 
at  present,  but  also  whenever  traveling  on  Departmental  busi- 
ness of  any  character,  upon  exhibition  of  their  credentials.  No 
such  privilege  is  enjoyed  by  officers  or  employes  of  any  other 
Department  of  the  National  Government. 

Supplementary  Provisions  of  the  Moon  Bill 

In  addition  to  the  very  wide  liberty  of  action  which  the 
Moon  bill  would  confer  upon  the  Postmaster  General,  in  the 

19 


administration  of  the  system  of  compensation  which  it  pur- 
ported to  estabHsh  in  the  main  body  of  the  bill,  the  measure  con- 
tained several  additional  sections,  conferring  further  broad  grants 
of  power,  under  which  the  Postmaster  General,  at  his  option, 
could  set  up  wholly  different  plans  of  payment  for  considerable 
portions  of  the  service. 

For  instance,  the  Moon  bill  provided  that  the  Postmaster 
General  might,  from  time  to  time,  obtain  information  from  the 
Interstate  Commerce  Commission  regarding  the  revenue  re- 
ceived by  railroad  companies  from  express  matter  and  arrange 
for  the  transportation  of  second-,  third-  and  fourth-class  matter 
at  "not  exceeding"  such  rates. 

This  provision  is  vague  in  that  it  does  not  specify  on  what 
basis  the  express  revenue  should  be  ascertained.  It  may  be 
pointed  out,  however,  that  the  express  companies  pay  the  rail- 
roads about  50  per  cent,  of  their  gross  revenues  for  the  trans- 
portation of  their  traffic,  while  the  Post  Office  Department  is 
at  present  paying  the  railroads  only  about  19  per  cent,  of  its 
gross  receipts. 

Of  similar  character  is  another  section  providing  that  the 
Postmaster  General  might  petition  the  Interstate  Commerce 
Commission  for  postal  carload  or  less-than-carload  rates  for 
fourth-class  matter  and  periodicals,  and  then  require  the  rail- 
roads to  carry  the  traffic  at  such  rates,  on  any  passenger  train 
and  under  any  conditions  named  by  the  Postmaster  General. 

If  these  provisions  offered  practicable  means  of  establish- 
ing correct  transportation  rates  for  second-,  third-  and  fourth-class 
mail  matter,  there  would  be  no  mail,  except  the  letter  mail 
(first-class  matter),  that  would  be  carried  on  the  space  basis  of 
pay  prescribed  in  the  Moon  bill,  and  this  would  only  be  about 
10  per  cent,  of  the  whole  mail  traffic* 

Service  Compulsory  Under  Moon  Bill 

The  feature  of  the  bill  making  the  service  compulsory, 
under  penalty  of  a  prohibitive  fine  for  refusal,  is  a  most 
important  departure.  The  present  law  contains  no  provision 
forcing  the  railroads  to  carry  the  mails,  under  specific  penalty. 

*  A  further  analysis  of  tlie  discretionary    features  of  the   Moon    hill   will  be    found  on 
page  61. 

20 


It  has  been  contended,  on  behalf  of  the  Post  Office  Depart- 
ment, that  the  Moon  bill  in  using  the  words  "not  exceeding," 
as  applied  to  its  scale  of  rates,  merely  follows  the  wording 
of  the  present  law,  which  authorizes  the  Postmaster  General 
to  pay  "not  exceeding"  certain  rates.  In  making  this  claim, 
however,  the  important  fact  is  lost  sight  of  that  the  present 
law  merely  authorizes  the  Postmaster  General  to  negotiate  with 
the  railroads  for  the  performance  of  the  service  and  places  a 
limit  upon  the  amount  he  may  offer  to  pay,  whereas  the  Moon 
bill  would  compel  xho.  railroads  to  render  such  service  as  the  Post- 
master General  might  demand,  at  such  rates  as  he  might  choose 
to  allow,  or  pay  a  fine  of  $5000  per  day  for  each  refusal  so  to  do. 

One  Cent  Per  Ton  Per  Mile  for  Parcel  Post 

The  rates  named  in  the  Moon  bill,  if  allowed  in  full  by 
the  Postmaster  General,  would  give  a  gross  return  of  about  20 
cents  per  mile  for  the  movement  of  a  60-foot  storage  car.  As 
such  a  car  could  be  loaded  with  20  tons  of  mail,  it  will  be  seen 
that,  even  at  the  maximum  payments  permitted  by  the  Moon 
bill,  the  Post  Office  Department  would  be  placed  in  possession 
of  machinery  whereby  it  could  compel  the  railroads  to  carry 
the  parcel  post  for  one  cent  per  ton  per  mile.  Such  service 
would  be  rendered  by  the  fastest  passenger  trains  or  by  special 
mail  trains,  and  it  is  needless  to  say  that  the  Post  Office  Depart- 
ment could  establish  postage  rates  for  the  parcel  post  which 
would  be  below  the  cost  of  transportation  and  with  which 
neither  the  express  nor  lighter  freight  services  could  possibly 
compete. 

It  would,  of  course,  be  possible  to  ship  full  carloads  of 
parcel  post  upon  the  heavier  mail  routes,  only  ;  but  approxi- 
mately the  same  rate  of  one  cent  per  ton  per  mile  would 
be  available  for  the  Department,  on  lighter  routes,  by  the 
authorization  of  30-foot  or  15-foot  apartments,  for  which  the 
Moon  bill  provides,  or  by  the  authorization  of  storage  space  of 
any  size  in  baggage  cars,  which  is  permitted  by  another  pro- 
vision of  the  Moon  bill. 

No  railroad  can  afford   to  carry  freight,  in  fast  passenger 

21 


trains,  at  a  rate  of  one  cent  per  ton  per  mile,  nor  would  it 
be  just  to  require  any  railroad  to  do  so. 

It  has  been  the  contention  of  those  who  have  advocated  a 
Governmental  postal  freight  service,  to  carry  heavy  packages  at 
extremely  low  postage  rates,  that  the  benefits  of  such  a  service 
would  be  very  wide-spread  and  would  be  of  special  value  to 
such  shippers  as  small  merchants  and  farmers.  The  recent 
report  of  Senator  Bristow's  Parcel  Post  Committee,  however, 
cast  serious  doubt  upon  this  claim.  The  Bristow  report  states 
that  about  60  per  cent,  of  all  fourth-class  matter  originates  in 
New  York  and  Chicago,  and  remarks  : 

"The  tremendous  amount  of  merchandise  sent  out  by  the 
mail  order  houses  of  these  cities  is,  of  course,  the  explanation 
of  this  condition." 

Entirely  aside  from  the  question  what  class  of  citizens  may 
or  may  not  be  benefited  by  an  expanded  parcel  post,  or  postal 
freight  service,  conducted  at  such  postage  rates  as  to  make  it  a 
subsidy  to  the  shipper,  it  cannot  be  contended,  with  fairness,  that 
the  cost  of  the  subsidy  should  be  borne  by  the  railroads.  Yet  the 
legislation  favored  by  the  Post  Office  Department  would  make 
it  possible  to  shift  the  principal  burden  of  such  subsidy  from 
the  Government  to  the  railroad  companies. 

Space  Plan  Disregards  Basic  Rate  Principle 

The  passage  of  the  Moon  bill,  or  of  any  other  bill  recog- 
nizing car  space  as  the  controlling  factor  in  determining  the 
rates  to  be  paid  for  mail  transportation  service,  might  serve  as  a 
precedent  entailing  the  possibility  of  grave  and  far-reaching 
consequences. 

It  is  obvious  that  the  establishment  of  the  space  plan  for 
the  railway  mail  service  would  mean  the  overthrow,  as  far  as 
that  service  is  concerned,  of  the  universally  recognized  and  en- 
tirely sound  principle  that  the  commercial  value  of  the  service 
to  the  shipper  is  properly  one  of  the  factors  to  be  considered  in 
determining  a  rate.  If  this  principle  is  disregarded  in  the  mail 
service,  there  would  appear  to  be  no  reason  why  it  could  not, 
with  equal  propriety,  be  disregarded  in  other  branches  of  the 

22 


transportation  service,  thus  imperiling  the  present  structure  of 
freight  rates. 

If  the  railroads  can  be  compelled  to  grant  to  a  number  of 
shippers,  acting  collectively  through  the  Post  OfHce  Depart- 
ment, the  right  to  ship  on  the  space  plan  of  payment,  there 
seems  to  be  no  good  reason  why  one  of  the  large  corporate 
shippers — a  great  manufacturing  company,  for  instance — should 
not  claim  an  equal  privilege. 

The  space  plan  of  payment,  applied  to  the  business  of  such 
a  shipper,  would  mean  that  the  manufacturing  company  would 
pay  the  railroads  about  the  average  C3.t -mile  earnings  of  a  freight 
car,  for  as  many  cars  as  it  could  use,  but  would  have  the  right  to 
load  every  car  to  fu//  capacity  without  additional  payment  for 
the  excess  of  weight  over  the  average  load.  Such  a  system  of 
payment  would  deprive  the  railroads  of  compensation  for  service 
actually  rendered,  and,  if  applied  to  the  general  freight  service, 
would  seriously  impair  the  financial  stability  of  many  companies. 

Flexibility  of  Space  Plan  Not  Reciprocal 

The  Post  Office  Department  has  put  forth  the  claim  that 
the  Moon  bill,  by  reason  of  the  space  plan  of  rates,  would 
automatically  readjust  the  pay  of  the  railroads  to  correspond 
with  the  changes  in  facilities  authorized  by  the  Department, 
thereby  meeting  the  objections  of  the  railroads  to  the  system 
of  "quadrennial  weighings,"  and  also  providing  means  whereby 
additional  service  required  at  such  times  as  Christmas  could 
be  officially  authorized  and  paid  for. 

It  is  the  opinion  of  those  who  have  studied  the  subject 
most  carefully  that  whatever  measure  of  justice  might  be  ac- 
corded, in  this  respect,  would  be  negligible  by  comparison  with 
the  injustice  in  other  directions  which  would  follow  adoption 
of  the  Moon  bill,  or  the  space  plan  of  payment. 

It  is  true  that  the  space  plan  would  alTord  means  whereby 
extra  cars  required  to  handle  the  Christmas  business  could  be 
authorized  and  paid  for,  but  it  is  also  true  that  during  the  slack 
seasons  the  authorizations  of  space  could  be  reduced,  and  the 
railroads  would  then  be  required,  in  many  cases,  to  haul  empty 
space  without  compensation.     There  is  no  manner  in  which 

23 


a  60-foot  mail  car  can  be  temporarily  rebuilt  to  a  30-foot 
apartment,  or  a  30-foot  apartment  cut  down  to  one  of  15  feet, 
to  correspond  with  a  temporary  reduction  in  authorization  on 
any  given  route.  The  full  car  or  large  apartment  would  have 
to  be  provided  and  hauled,  while  only  half  the  space  might  be 
paid  for. 

Some  Important  Distinctions  as  to  Car  Space 

It  is  important  to  note,  in  this  connection,  that  car  space 
authorized^  car  space  used  and  the  car  space  that,  as  a  matter  of 
practical  necessity,  the  railroads  may  be  compelled  to  furnish, 
are  three  very  different  things,  and  it  is  space  authorized  that 
the  Post  Office  Department  proposes  to  pay  for. 

The  weight  plan  of  payment,  if  properly  administered, 
would  include  compensation  to  the  railroads  for  the  extra  service 
furnished  during  the  rush  periods.  The  weight  for  which 
payment  is  made,  on  any  route,  is  supposed  to  be  the  average 
daily  weight  carried  on  that  route  during  the  entire  year,  includ- 
ing the  service  rendered  in  rush  periods.  If  the  weights  were 
ascertained  with  sufficient  frequency,  and  for  representative 
periods  of  the  year,  compensation  for  such  extra  service  would 
be  given. 

The  space  plan  of  payment  for  the  railway  mail  service,  not- 
withstanding the  defects  which  analysis  reveals,  has  appeared 
attractive  to  the  minds  of  some  influential  members  of  Congress, 
partly,  no  doubt,  on  account  of  its  seeming  simplicity. 

It  presumably  appeals  to  the  Post  Office  Department 
because  it  would  provide  a  means  whereby  the  exparided  parcel 
post  could  be  successfully  operated  in  commercial  competi- 
tion with  the  freight  and  express  services.  Such  competition, 
except  at  a  heavy  loss  to  the  Government,  could  only  be  carried 
on  at  the  direct  expense  of  the  railroads,  but,  nevertheless,  the 
Department  seems,  thus  far,  committed  to  that  course,  despite 
the  fact  that  it  would  retain  the  weight  basis  in  making  its  rates 
of  postage  to  the  public. 

Governmental  Competition  vs.  Regulation 

Ordinarily,  in  considering  any  question  of  rates,  the  only 
proper   concern    of   the    railroads,    as    common  carriers,  is  to 

24 


obtain  fair  and  just  payment  for  the  service  they  are  called  upon 
to  perform.  This  is  the  attitude  which  railroad  managers  have 
always  hitherto  maintained  toward  the  parcel  post,  and  which 
they  are  endeavoring  to  continue  to  maintain,  despite  certain 
further  considerations  that  are  being  forced  upon  their  attention. 

How  is  it  possible,  for  instance,  to  ignore  the  fact  that, 
whereas,  the  parcel  post,  as  originally  established  by  Congress, 
with  a  weight  limit  of  11  pounds,  was  a  supplementary  service, 
filling  in  a  gap  which  previously  existed  between  the  old  fourth- 
class  mail  and  the  express  service,  the  subsequent  extension  of 
the  weight  limit  to  50  pounds  has  brought  the  parcel  post  into 
active  competition  not  only  with  express,  but  also  with  freight  ? 

It  is  well  to  consider  how  and  by  what  means  the  Govern- 
ment is  able  to  compete  with  the  railroads  for  commercial  trans- 
portation business.  The  Government  owns  no  transportation 
facilities,  whatever,  in  the  continental  United  States.  When  it 
enters  the  freight  and  express  business,  having  no  facilities  of 
its  own,  it  must  commandeer  the  use  of  the  facilities  of  the  rail- 
roads. But  the  railroads  are  already  using  those  facilities  in 
giving  service  to  the  public,  directly  or  through  the  express 
companies.  Moreover,  the  rates  which  the  railroads  obtain  for 
the  service  cannot  be  higher  than  the  Interstate  Commerce 
Commission  pronounces  to  be  reasonable.  The  Government 
can  underbid  the  railroads  for  such  service  only  by  using  its 
sovereign  power  in  compelling  them  to  employ  their  facilities 
in  rendering  service  to  the  Government  at  rates  lower  than  those 
declared  reasonable.  Thus  the  Government  would  be  forcing 
the  railroads  to  use  their  facilities  against  themselves,  and  in 
competition  with  that  service  which  they  are  rendering  to  the 
public  under  the  protection  and  regulative  authority  of  the 
Government. 

Is  Governmental  competition  consistent  with  Governmental 
regulation  ? 

What  Does  Public  Sentiment  Favor  ? 

Certain  other  questions  naturally  suggest  themselves.  For 
example,  has  there  been  any  evidence  of  a  popular  demand  for 
the  Post  Office  Department  to  enter  into  commercial  competi- 


25 


tion  with  the  railroads,  or  to  convert  the  mails  from  a  medium 
for  the  diffusion  of  intelligence,  and  the  incidental  carrying 
of   small  parcels,  into  a  general   freight  and  express  agency? 

Is  it  not  rather  the  case  that  public  sentiment  would  look 
with  more  favor  upon  steps  which  would  enhance  the  quality 
of  the  mail  service  proper,  /".  e.,  the  prompt  and  accurate  dispatch 
of  correspondence,  newspapers  and  periodicals,  and  leave  the 
development  of  freight  and  express  traffic  to  the  agencies  espe- 
cially created  to  handle  it  and  to  the  regulative  authority  of  the 
Governmental  body  especially  appointed  to  control  it  ? 

In  Great  Britain,  where  the  parcel  post  was  established  years 
before  its  inauguration  in  this  country,  it  has  never  been  thought 
necessary  to  go  beyond  the  international  weight  limit  of  11 
pounds. 

If  the  Post  Office  Department's  plans,  as  generally  under- 
stood, are  carried  out,  it  seems  probable  that  the  weight  limit 
for  the  parcel  post  in  this  country  will  be  further  expanded  to 
100  pounds,  or  more,  causing  increased  losses  to  the  railroad 
companies  in  revenue,  and  loading  upon  the  passenger  train 
service  heavy  postal  freight,  with  resultant  delays  to  trains. 

What  the  Joint  Congressional  Committee  Held 

The  report  of  the  Joint  Congressional  Committee  on  Rail- 
way Mail  Pay,  submitted  last  August,  as  has  been  stated,  unani- 
mously sustained  the  chief  contentions  of  the  railroads,  which 
were: 

That  the  present  total  compensation  for  carrying  the 
mails  is  inadequate ; 

That  the  system  of  "quadrennial  weighings"  of  the 
mail  is  unfair  and  unbusinesslike ; 

That  apartment  post  office  cars  should  be  paid  for  on 
the  same  pro  rata  basis  as  the  full  cars  ; 

That  the  railroads  should  be  relieved  of,  or  paid  for, 
the  messenger  services  performed  in  carrying  the  mails 
between  railroad  stations  and  post  offices,  and  between 
railroad  stations  on  different  lines. 

The  Joint  Committee  also  reached  the  following  most 
important  conclusions : 

26 


That  the  railroads  are  entitled  to  be  paid  for  mail  trans- 
portation on  a  commercial  basis  ; 

That  the  mail  service,  being  performed  by  passenger 
trains,  should  return  as  much,  per  car-mile,  as  the  general 
average  of  the  passenger  train  service  ; 

That  the  mail  service,  per  car-mile,  yields  a  lower 
return  and  costs  more  to  perform  than  the  express  service  ; 

That  Government  ownership  of  mail  cars  would  be 
objectionable  on  the  ground  of  public  policy  and  would 
cost  the  Government  more  than  operation  under  railroad 
ownership. 

The  Joint  Congressional  Committee's  conclusions  of  fact 
being  unanimous,  and  having  been  reached  only  after  the  most 
careful  study  and  consideration,  should  meet  with  general 
acceptance. 

Mail  and  Express  Earnings  of  the  Railroads 

The  Joint  Committee's  conclusions  are  of  particular  im- 
portance in  view  of  the  Post  Office  Department's  contention 
that  the  railroads  are  better  paid  for  carrying  the  mails  than  for 
handling  the  traffic  of  the  express  companies.  The  argument 
by  which  the  Department  has  sought  to  sustain  this  position 
rests  upon  the  citation  of  some  two  score  of  specific  shipments. 

The  instances  cited,  however,  were  far  from  being  repre- 
sentative, for  two  vital  reasons:  (1)  In  every  case  the  railroads' 
share  of  the  very  lowest  wholesale  express  rate,  that  for  a  single 
100-pound  package,  was  compared  with  the  average  mail  earn- 
ings. (2)  The  hauls,  in  the  instances  cited  by  the  Department, 
averaged  1600  miles  each,  whereas  the  Interstate  Commerce 
Commission  has  found  that  the  average  express  haul  is  only 
about  200  miles  and  the  average  weight  per  package  about  33 
pounds.  Business  fairly  representative  of  average  conditions 
will  show  a  higher  net  return  per  pound  from  the  express  than 
from  the  mail  service. 

The  Joint  Congressional  Committee  considered  the  mail 
and  express  services  as  a  whole,  and  reached  the  conclusion 
that  the  mail  is  the  less  remunerative.  This  is  the  latest  and 
most  authoritative  decision  upon  the  question,  by  a  disinterested 
body. 

27 


Moreover,  the  Committee  pointed  out  that  the  mail  and 
express  services,  as  performed  by  the  railroads,  instead  of  being 
essentially  similar,  differ  greatly  in  important  respects,  so  that  a 
consideration  of  rates,  without,  also,  a  consideration  of  the 
nature  of  the  services  rendered,  does  not  afford  a  reliable  basis 
of  comparison. 

The  Right  to  a  Commercial  Profit  from  Mail  Traffic 

The  Joint  Congressional  Committee's  affirmation  of  the 
principle  that  the  railroads  are  justly  entitled  to  a  fair  commer- 
cial rate  from  the  service  of  transporting  the  mails  is  also  a  con- 
clusion of  primary  importance.  In  the  course  of  the  hearings 
before  the  Joint  Congressional  Committee,  the  representatives 
of  the  Post  Office  Department  advanced  the  theory  that  in 
transporting  the  mails  the  railroads  were  performing  a  Govern- 
mental function,  and  that  for  this  reason  the  railroads  might  be 
required  to  carry  the  mails  at  rates  materially  below  the  com- 
mercial value  of  the  service. 

The  Joint  Congressional  Committee  rejected  this  conten- 
tion and  said : 

"  Fair  rates  should  be  made  in  all  branches  of  traffic,  other- 
wise a  deficiency  of  return  from  one  branch  must  be  made  up 
by  an  overcharge  from  another  branch.     .     .     . 

**The  desirability  of  diffusing  intelligence  may  well  be 
taken  into  account  in  fixing  the  postage  rates  to  be  paid  by  the 
public,  but  it  is  not  clear  that  this  has  any  connection  with 
what  the  Government  should  pay  the  railroads. 

**  Do  we  ask  a  mail  clerk  to  work  for  less  than  a  normal 
salary  because  he  handles  letters  ?  Does  the  manufacturer  of 
desks  make  a  special  price  to  the  Post  Office  Department  be- 
cause the  mail  service  helps  to  diffuse  intelligence?  Then 
why  should  the  railroad,  which  is  merely  another  instrumen- 
tality used  by  the  Government  in  its  mail  business,  sell  its  ser- 
vices at  an  abnormally  low  rate  if  the  Government  is  able  to 
pay  the  normal  rate  ?  " 

Equally  significant  is  the  principle  laid  down  by  the  Inter- 
state Commerce  Commission  in  the  Advance  Freight  Rate 
Case  decision  of  July  29,  1914: 

28 


"  In  our  opinion  each  branch  of  the  service  should  con- 
tribute its  proper  share  of  the  cost  of  operation  and  of  return 
upon  the  property  devoted  to  the  use  of  the  pubUc." 

The  Joint  Congressional  Committee*s  Bill 

The  bill  recommended  by  the  Joint  Committee  is  mainly  free 
from  the  objectionable  discretionary  features  found  in  the  Moon 
bill,  but  its  scale  of  rates  is  only  slightly  higher  than  the  rates 
in  Chairman  Moon's  measure.  Moreover,  the  same  facility 
would  be  afforded  the  Post  Office  Department  for  effecting 
shipments  of  the  parcel  post  at  most  unremunerative  rates 
(approximately  one  cent  per  ton  per  mile),  and  it  is  herein  that 
there  is  the  greatest  possibility  of  injustice  to  the  railroads  from 
the  space  basis  of  pay. 

While  the  Joint  Committee  bill  vv^ould  no  doubt  be  decid- 
edly preferable  to  the  Moon  bill,  it  is  not  a  measure  that  the 
railroads  can  consistently  advocate.  Although  the  Joint  Com- 
mittee believed  that  the  provisions  of  the  bill  w^ould  increase 
the  pay  of  the  railroads  by  some  $3,000,000  per  year,  with 
relief  from  the  messenger  services,  representing  some  $2,000,000 
more,  the  space  plan  of  payment  necessarily  allows  of  so  much 
latitude  in  administration  that  it  would  be  feasible  for  the  Post 
Office  Department,  under  the  terms  even  of  this  measure,  to 
reduce  in  considerable  degree  the  compensation  for  the  service 
now  rendered,  as  well  as  make  possible  a  large  expansion  in 
parcel  post  freight  with  little  or  no  corresponding  increase 
in  pay. 

Reference  to  Interstate  Commerce  Commission 

It  is  the  opinion  of  the  Committee  on  Railway  Mail  Pay 
that  the  ultimate  solution  of  the  railway  mail  pay  problem  lies 
in  reference  of  the  matter  to  the  Interstate  Commerce  Com- 
mission, with  complete  power.  This  would  take  the  question 
out  of  politics,  which  would  be  in  the  highest  degree  advisable. 
The  problem  is  not  political,  but  economic.  Reference  to  the 
Interstate  Commerce  Commission  would  round  out,  and  make 
complete,  as  far  as  interstate  traffic  is  concerned,  the  regulative 
authority  of  the  Commission,  and  so  give  full  opportunity  for 

29 


testing  out  the  system  of  public  regulation  of  railroads  which 
this  nation  has  adopted. 

Besides,  the  development  of  the  parcel  post  as  a  commer- 
cial service,  competitive  with  freight  and  express,  makes  it 
fitting  that  the  same  authority  which  regulates  freight  and 
express  rates  and  traffic  should  exercise  a  like  supervision  in  the 
case  of  the  mail  traffic. 

It  is  the  belief  of  the  Committee  on  Railway  Mail  Pay 
that  the  railroads  will  have  the  support  of  the  public  in  favoring 
such  a  step,  and  that  the  American  people  will  consider  the 
willingness  of  the  railroads  to  abide  by  the  judgment  of  the  Inter- 
state Commerce  Commission  as  an  evidence  of  good  faith. 


30 


IV 

Recommendations  of  the  Committee 
on  Railway  Mail  Pay 

The  Committee  on  Railway  Mail  Pay,  after  careful  study 
and  consideration  of  all  the  suggested  plans  for  making  car 
space  the  basis  of  payment  for  the  railway  mail  service,  Is  firmly 
convinced  that  any  of  these  plans  would  prove  inherently  de- 
fective. The  Committee  earnestly  believes  that  the  space  basis 
of  payment,  when  put  to  the  actual  test,  would  inflict  great 
injustice  upon  the  railroads,  by  depriving  them  of  compensa- 
tion for  much  of  the  service  actually  rendered,  while  it  would 
also  prove  injurious  to  the  public  by  tending  strongly  to  cause 
deterioration  in  the  quality  of  the  service. 

The  space  system  would  mean  payment  ior  facilities ^  instead 
of  for  service.  It  would  at  times  create  an  incentive  for  the 
Post  Office  Department  to  achieve  economies  through  a  curtail- 
ment of  facilities,  by  reducing  the  frequency  of  dispatch  and 
concentrating  the  mails  into  carload  lots.  At  other  times  it 
would  provide  a  temptation  for  undue  expansion  of  facilities, 
through  variance  of  views  or  influences,  without  the  salutary 
check  of  the  weight  of  mail  actually  to  be  dealt  with. 

The  weight  system  of  payment,  on  the  other  hand, 
makes  service  rendered,  that  is,  the  weight  of  mail  transported, 
the  controlling  factor  in  determining  the  compensation  of  the 
railroads.  Such  a  system  places  all  the  facilities  of  the  railroads 
freely  at  the  call  of  the  Post  Office  Department,  and  not  only 
assures  the  fullest  service  to  the  public,  but,  if  properly  devised 
and  administered,  assures  the  railroads  of  fair  payment  in  pro- 
portion to  the  service  required  of  them. 

Weight  System  of  Pay  Fundamentally  Sound 

The  Committee  on  Railway  Mail  Pay  is  therefore  con- 
vinced that  the  present  system  of  payment  is  essentially  sound 
in  being  based  primarily  upon  the  weight  of  mail  and  length  of 
haul.     Such  a  basis  of  payment  is  the  fairest,  simplest  and  most 

31 


direct  that  can  be  devised,  as  it  means  payment  for  each  pound 
of  mail,  in  proportion  to  the  distance  it  is  carried,  which  is  the 
natural  measure  of  the  service  performed.  Moreover,  the 
present  scale  of  rates  scientifically  follows  the  wholesale  and 
retail  principle,  with  the  compensation  per  pound  decreasing 
sharply  as  the  average  daily  weight  carried  increases.  Thus,  a 
large  railroad,  operating  a  route  over  which  more  than  5000 
pounds  of  mail  are  carried  daily,  receives,  for  the  surplus,  only 
one-twentieth  as  much  per  pound  as  does  a  small  railroad, 
carrying  200  pounds  or  less  daily,  over  a  route  of  equal  length. 

The  fundamental  correctness  and  justice  of  basing  the 
compensation  of  the  railroads  upon  the  weight  of  mail  carried 
was  clearly  perceived  by  theWolcott-Loud  Congressional  Com- 
mission. In  its  report  to  Congress  in  1901,  the  Wolcott-Loud 
Commission,  referring  to  the  weight  system  of  pay  as  it  was  in 
force  at  that  time  (which,  of  course,  was  prior  to  the  two  re- 
ductions in  rates  made  in  1907,  by  Congress  and  the  Post  Office 
Department),  said: 

"  After  carefully  canvassing  the  whole  situation,  we  are  of 
the  opinion  that,  all  things  considered,  the  present  plan  of  ad- 
justing the  railway  mail  pay  is  the  most  fair  and  feasible  one; 
and  we  are  satisfied  that  it  is  the  most  advantageous  one  to  the 
Government  and  believe  that  it,  on  the  whole,  is  as  just  to  the 
railroads  as  any  that  can  at  present  be  devised." 

The  Wolcott-Loud  Commission  specifically  declined  to 
recommend  car  space  as  **the  controlling  standard  by  which 
the  rates  of  compensation  for  the  transportation  of  the  mails 
shall  be  fixed." 

Scientific  Structure  of  Present 
Rate  System 

Prof.  Henry  C.  Adams  (for  many  years  Statistician  of  the 
Interstate  Commerce  Commission),  who  acted  in  an  advisory 
capacity  to  the  Wolcott-Loud  Congressional  Commission, 
commented  in  his  report  of  February  1,  1900,  upon  the  law  of 
1873,  under  which  the  railroads  are  paid  for  mail  transportation. 
The  following  is  a  summary  of  some  of  the  opinions  expressed  : 

32 


Under  the  law,  the  basis  of  compensation  is  not  weight 
alone,  but  weight  multiplied  into  distance.  The  law  of  1873  is 
drawn  in  harmony  with  the  fundamental  law  of  transportation, 
namely,  that  volume  of  traffic  renders  economy  possible,  result- 
ing in  a  reduction  of  rates;  further,  that  the  effect  of  increased 
traffic  in  reducing  cost  is  relatively  more  intense  for  a  road  whose 
traffic  is  sparse  than  for  a  road  whose  traffic  is  dense,  and  this 
refinement  of  the  fundamental  law  of  transportation  is  also  ex- 
pressed in  the  act  of  1873.  He  points  out  that  the  mail  routes 
which  were  arbitrarily  classified  according  to  the  law  of  1845 
secure  a  classification  more  nearly  perfect  under  the  law  of  1873, 
because  it  is  adjusted  to  the  fundamental  law  of  transportation 
that  the  cost  per  unit  of  traffic  decreases  with  the  increase  of  the 
density  of  traffic.  He  finally  concludes  that  the  natural  opera- 
tion of  the  law  of  1873  is  to  concentrate  the  mail  traffic  upon  the 
most  direct  routes. 

This  is  competent  testimony  from  a  high  authority  as  to 
the  scientific  structure  of  the  weight  and  rate  schedule  laid 
down  in  the  law  of  1873. 

In  commenting  upon  the  tendency  of  the  law  of  1873  to 
foster  economy  and  efficiency  in  the  handling  of  the  mail 
traffic,  by  concentrating  it  upon  the  most  direct  routes,  Prof. 
Adams  might  very  pertinently  have  added  that  one  result  of 
this  tendency  has  been  to  make  possible  the  operation  of  special 
fast  mail  trains.  The  continuance  of  such  trains,  and  of  the 
expedited  mail  service  rendered  by  them,  would  be  imme- 
diately menaced  by  the  adoption  of  the  space  plan  of  payment, 
as  it  would  be  highly  questionable  whether  any  railroad  man- 
agement would  be  justified  in  offering  such  extraordinary  and 
expensive  service  to  the  Government  at  the  rates  named  in 
either  of  the  space  plan  bills  which  have  been  introduced  in 
Congress. 

Car  Space  Not  a  Gauge  of  Service  Rendered 

When  a  railroad  carries,  say,  three  tons  of  mail  100  miles, 
what  is  the  real  nature  of  the  service  the  railroad  renders  to  the 
Post  Office  Department  and  the  public  ? 

Is  it  the  hauling  of  a  60-foot  car  100  miles  ? 

Or  is  it  the  transportation  of  three  tons  of  mail  100  miles  .? 

33 


Necessarily  it  must  be  the  latter,  as  it  is  not  the  car,  but  the 
mail,  that  the  Department  desires  moved.  The  interest  of  the 
Department  and  the  public  in  the  movement  of  the  car  is  not 
direct,  but  merely  incidental. 

The. fundamental  defect  of  the  space  plan  of  payment  for 
the  railway  mail  service  is  that  car  space  is  not  in  itself  a  meas- 
ure of  the  service  rendered.  It  is  a  "tool  of  trade  "  belonging 
to  the  railroads,  to  be  used  in  conjunction  with  motive  power, 
road-bed,  rails,  bridges,  terminals,  signals,  and  the  organized 
efforts  of  a  force  of  employes,  in  rendering  service  to  the  pub- 
lic and  earning  reasonable  revenues,  under  the  protection  of 
the  Constitution  and  the  laws.  The  railroads  cannot,  with  justice, 
be  deprived  of  its  control  at  an  arbitrary  and  inadequate  valu- 
ation. 

Opinion  vs.  Service  as  a  Basis  of  Pay 

The  precise  amount  of  car  space  which  shall  be  sufficient 
for  the  proper  conveyance  of  the  mails,  and  their  distribution 
in  transit,  on  any  given  mail  route,  and  which  shall  at  the  same 
time  not  be  excessive,  is  a  matter  of  personal  opinion  upon 
which  individuals  might  differ  greatly. 

Hardly  anyone  would  question  that  the  compensation  paid 
the  railroads  for  any  service  should  be  in  proportion  to  the 
amount  of  service  rendered.  The  advocates  of  the  space  plan 
of  payment  for  mail  transportation,  however,  appear  to  have 
overlooked  the  fact  that  its  effect  would  be  to  pay  a  railroad 
exactly  the  same  sum  for  carrying,  over  a  given  distance,  a  car 
loaded  with  one  ton,  10  tons  or  20  tons  of  mail.  Is  it  possible 
to  maintain  that  the  transportation  of  20  tons  of  mail  is  not  a 
greater  service,  and  fairly  worth  more,  than  the  transportation 
of  one  ton  ? 

The  weight  of  mail  carried  is  a  concrete  fact  which  can  be 
ascertained  at  any  time  and  as  frequently  as  necessary,  and  is 
not  open  to  controversy.  As  the  basis  of  transportation  rates,  it 
furnishes  a  definite  measure  by  which  the  compensation  due 
for  the  service  rendered  can  be  calculated  with  mathematical 
precision.  Weig/ii  multiplied  by  distance  is  the  universal  gauge 
of  the  service  of  transporting  things.  It  is  used  by  the  Post 
Office  Department,  itself,  in  its  scale  of  parcel  post  rates. 


34 


Defects  of  the  Present  Practice 

The  present  method  of  compensation  for  the  railway  mail 
service,  while  resting  on  a  law  that  is  fundamentally  sound  in 
utilizing  the  factors  of  weight  and  distance,  contains,  as  now 
administered,  certain  defects  which  have  operated  inequitably 
against  the  railroads.  Nevertheless,  these  defects  can  be  easily 
and  simply  remedied.     They  are  : 

1.  The  **  quadrennial  weighings,"  by  which  the  mails  are 
weighed  and  the  compensation  adjusted  on  any  given  railroad 
route  only  once  in  four  years.  This  practice  compels  the  rail- 
roads to  carry  the  increase  in  the  mail  traffic,  without  increased 
compensation,  for  unreasonably  long  periods.  The  advent  and 
rapid  growth  of  the  parcel  post  has  made  the  quadrennial 
weighings  most  unjust,  as  has  previously  been  explained  in  detail. 

2.  The  established  system  of  payment  properly  recognizes 
the  fact  that  the  railroads  are  entitled  to  compensation  for  the 
extra  car  space  used  by  the  Post  Office  Department  for  trans- 
porting postal  clerks  and  conducting  post  office  work  in  moving 
trains.  It  recognizes  the  fact  that  the  light  average  load  of  mail 
carried  in  a  railway  post  office  car  (about  2^  tons  in  a  car  capable 
of  carrying  20  or  more  tons)  does  not  constitute  a  paying  load, 
and  that  the  railroads,  in  addition  to  being  paid  for  this  small 
weight  of  mail,  should  be  compensated  for  turning  over  the 
use  of  the  entire  car  to  the  Post  Office  Department  for  clerical 
work.  The  present  system  of  compensation,  however,  recog- 
nizes this  principle  only  when  applied  to  whole  cars,  and  pro- 
vides no  method  by  which  the  railroads  can  be  paid  for  similar 
facilities  furnished  in  mail  apartment  cars.  More  than  4200 
apartments  of  this  character  are  now  fitted  up  and  operated  for 
the  exclusive  use  of  the  Post  Office  Department. 

3.  The  railroads  are  required,  without  additional  compen- 
sation, and  at  a  considerable  annual  expense  and  inconvenience, 
to  carry  the  mails  between  railroad  stations  and  post  offices,  also 
between  railroad  stations  on  different  lines.  These  duties, 
which  are  outside  the  scope  of  railroad  transportation,  are  usually 
known  as  "side,  transfer  and  terminal  messenger  services." 

35 


The  Remedies  Suggested 

It  is  the  belief  of  the  Committee  on  Railway  Mail  Pay  that 
the  foregoing  defects  can  best  be  corrected  by  providing  the 
following  remedies : 

1.  That  the  mails  be  weighed,  and  the  pay  readjusted, 
at  least  once  a  year  on  every  railway  mail  route,  instead  of 
once  in  four  years,  as  at  present. 

2.  That  the  railroads  be  paid  for  the  use  and  operation 
of  apartment  post  office  cars— for  which  the  present  law 
allow^s  no  pay — on  a  pro  rata  basis  with  the  compensation 
allowed  for  full  railway  post  office  cars. 

3.  That  the  railroads  be  paid  for,  or  relieved  from,  the 
duty  of  carrying  the  mails  between  railroad  stations  and 
post  offices. 

These  remedies,  in  the  opinion  of  the  Committee  on  Rail- 
way Mail  Pay,  will  give  the  railroads  just  compensation,  afford 
the  Government  full  protection  and  assure  to  the  public  the 
continuance  of  a  high  quality  of  railway  mail  service. 


36 


The  Present  Law  and  Proposed 
Legislation 

EXHIBIT  A 

A  SUMMARY  OF  THE  PRESENT  LAW  AS   SET  FORTH  IN 
THE  REPORT  OF  THE  JOINT  CONGRESS- 
IONAL COMMITTEE. 

(Extract  from  Report  of  Joint  Congressional  Committee,  August  31,  1914,  Page  59.) 

Brief  summary  of  laws  enacted  upon  this  subject,  beginning  with 
the  Act  of  1873,  which  is  the  basis  of  the  present  system  of  railway 
mail  compensation: 

The  Act  of  March  3, 1873,  authorized  and  directed  the  Postmaster 

General  to  readjust  railway  mail  compensation  on  the  basis  of  a  rate 

per  mile  per  annum  according  to  the  average  daily  weight  carried  on 

each  route,  the  weight  being  determined  by  weighing  of  the  mails  for 

not  less  than  30  successive  working  days,  and  at  least  once  in  every  four 

years.     The  rates  are  stated  in  the  following  table : 

Rates  allow- 
Average  weight  of  mails  per  day  carried  over  whole  length       able  under 

of  route:  ,,  ^^^  ,„-« 

Mar.  3, 1873. 

200  pounds $50 

600  pounds 75 

1,000  pounds 100 

1,500  pounds 125 

2,000  pounds 150 

3,500  pounds 175 

6,000  pounds 200 

For  each  additional  2,000  above  5,000  and  less 

than  48,000  pounds 25 

For  each  additional  2,000  pounds  in  excess  of 

48,000  pounds   25 

The  same  Act  provided  that  additional  pay  should  be  allowed  for 
a  daily  trip  of  a  full  railway  post-office  car  40  feet  or  more  in  length  at 
the  following  rates  per  mile  per  annum : 

40-foot  car $25 

45-foot  car 30 

50-foot  car 40 

65  to  60-foot  car  (or  more) 50 

37 


The  Act  of  July  12,  1876,  made  a  flat  reduction  of  10  per  cent  in 
each  of  the  weight  rates.  The  same  Act  provided  that  land-grant 
railroads  shall  be  paid  only  80  per  cent  of  the  regular  rates. 

The  Act  of  June  17, 1878,  made  a  further  reduction  of  5  per  cent 
in  the  weight  rates. 

The  Act  of  March  3,  1905,  required  that  the  mails  should  be 
weighea  ror  not  less  than  90  successive  working  days  instead  of  for 
30  days,  as  required  by  the  law  of  1873. 

The  Act  of  March  2,  1907,  made  a  further  reduction  of  5  per  cent 
in  the  weight  rates  on  routes  carrying  a  daily  average  of  over  5,000 
pounds  and  a  reduction  of  10  per  cent  in  the  rates  on  routes  carrying  a 
daily  average  of  over  48,000  pounds. 

The  same  Act  made  reductions  in  the  rates  to  be  paid  for  R.  P.  O. 
car  service,  the  new  rates  per  mile  per  annum  being: 

40-foot  car $25.00 

45-foot  car 27 .  50 

50-foot  car 32.50 

55  to  60-foot  car  (or  more) 40.00 

On  June  7,  1907,  Postmaster  General  Meyer  issued  Order  No.  412, 
changing  the  method  of  computing  the  average  daily  weight  of  mail 
carried.  Although  this  was  not  a  change  in  the  law,  it  is  mentioned 
here  because  it  was  a  change  in  the  interpretation  of  law  which  had 
the  effect  of  reducing  the  pay  of  the  railroads  about  $5,000,000  per 
annum. 

The  Act  of  May  12,  1910,  reduced  the  rate  for  land-grant  routes 
on  each  2,000  pounds  in  excess  of  48,000  pounds  from  $17.10  to  $15.39. 

The  Act  of  August  24,  1912,  authorized  the  Postmaster  General 
to  readjust  pay  if  mail  be  diverted  from  one  route  to  another  to  the 
extent  of  not  less  than  10  per  cent  of  the  weight  on  either  route. 


38 


PRESENT  WEIGHT  RATES. 
The  annual  rates  now  in  force  are  as  follows : 


Average  weight  of  mails  per  day  carried  over 
whole  length  of  route. 


200  pounds 

200  to  500  pounds 

500  pounds 

500  to  1,000  pounds 

1,000  pounds 

1,000  to  1,500  pounds 

1,500  pounds 

1,500  to  2,000  pounds 

2,000  pounds 

2,000  to  3,500  pounds 

3,500  pounds 

3,500  to  5,000  pounds 

5,000  pounds 

For  each   additional    2,000   pounds 

above  5,000  and  less  than  48,000 

pounds 

Above  5,000  and  less  than  48,000 

pounds 

For  each  additional  2,000  pounds  in 

excess  of  48,000  pounds 


To  non 

land-grant 

railroads 

per  mile 

per  annum. 


$42.75 
64^12 
85^50 
106 ! 87 
128^25 
149! 62 
171^00 

20.30+ 
19.24 


To  land- 
grant  rail- 
roads per 
mile  per 
annum. 


Intermediate 
weights  for 
which  addi- 
tional allow- 
ance is  paid 
at  the  rates 
stated  in 
Note  1, 


$34 . 20 

51^30 

68^40 

85^50 

102^60 

119'70 

136^80 

1G.24  + 
15.39 


Pounds. 

12 
"20 
'20 
"20 
"60 

60 


80 


NOTE  1. — For  each  additional  number  of  pounds  weight  indicated  in  the  third 
column  there  is  paid  to  non  land-grant  roads  85  cents  per  mile  per  annum,  and  to 
land-grant  roads  68+  cents  per  mile  per  annum,  except  that  on  routes  carrying  from 
5,000  to  48,000  pounds  the  additional  allowance  is  81  cents  per  mile  per  annum  to 
non  land-grant  roads  and  64  cents  per  mile  per  annum  to  land-grant  roads. 


39 


EXHIBIT  B 

A  COPY  OF  THE  PROPOSED  AMENDMENT  TO  THE  PRES- 
ENT  LAW   RECOMMENDED    BY    THE    COM- 
MITTEE ON  RAILWAY  MAIL  PAY. 

(Extract  from  Hearing  Before  Joint  Congressional  Committee,  Page  181). 

"We  would  ask  to  present  a  bill,  which,  in  our  opinion,  would 
remedy  our  difficulty.  Our  Committee  have  all  felt  that  we  could 
stand  by  the  present  law,  provided  it  could  be  amended,  and  in  our 
draft  we  have  endeavored  to  make  that  amendment  as  simple  and  as 
brief  as  possible.     That  is  what  we  have  suggested  here. 

"  *  A  BILL  To  provide  for  the  transportation  of  parcel-post  matter, 
to  amend  existing  laws  relative  thereto,  and  to  equalize  pay  for  mail 
service  on  railroad  lines. 

"  'BE  IT  ENACTED  BY  THE  SENATE  AND  HOUSE  OF 
REPRESENTATIVES  OF  THE  UNITED  STATES  OF  AMERICA 
IN  CONGRESS  ASSEMBLED,  That  the  proviso  in  the  Act  of  March 
third,  nineteen  hundred  and  five,  "That  hereafter,  before  making  the 
readjustment  of  pay  for  transportation  of  mails  on  railroad  routes,  the 
average  weight  shall  be  ascertained  by  the  actual  weighing  of  the  mails 
for  such  number  of  successive  working  days,  not  less  than  ninety,"  be 
and  the  same  is  hereby  repealed,  and  that  hereafter  such  weighings 
shall  be  simultaneous  on  all  railroad  mail  routes  not  less  frequently 
than  once  in  each  year;  and  the  Postmaster  General  is  hereby  author- 
ized and  directed  to  require  a  railroad  mail  carrier  to  provide  for  the 
carriage  of  the  mails  between  its  trains  and  a  post  office  or  postal  sta- 
tion only  where  such  post  office  or  postal  station  is  located  in  a  railroad 
depot  or  station  of  such  carrier,  and  the  Postmaster  General  is  hereby 
authorized  and  directed  to  pay  for  space  used  as  railway  post  offices  in 
apartment  cars  in  proportion  to  the  present  rate  allowed  for  postal 
cars  sixty  feet  in  length.'  " 


40 


EXHIBIT  C 

A  COPY  OF  THE   BILL   RECOMMENDED   BY  THE   JOINT 
CONGRESSIONAL  COMMITTEE. 

(Extract  from  Report  of  Joint  Congressional  Committee,  August  31,  1914,  Page  21). 

"In  our  suggested  bill  we  purposely  make  our  rates  fixed,  and  not 
merely  maximum,  leaving  no  discretionary  power  to  the  Postmaster 
General  to  autocratically  change  the  same.  We  assert  that  it  would 
not  only  be  most  unjust,  but  destructive  of  confidence  in  our  Govern- 
ment and  unparalleled  in  rate  making  for  Congress  to  fix  the  maximum 
rates  and  delegate  to  the  Postmaster  General  the  right  to  determine 
the  minimum  rates,  he  as  the  Government's  representative  being  the 
shipper  in  mail  transportation. 

"We  have  spent  nearly  two  years  in  this  study,  have  conscien- 
tiously and  to  the  best  of  our  ability  endeavored  to  perform  the  duties 
placed  upon  us  by  Congress  in  its  creation  of  our  committee.  We  feel 
confident  we  have  worked  out  a  sound,  scientific,  and  simple  plan.  We 
believe  our  suggested  rates  are  certainly  not  too  high  from  a  govern- 
mental standpoint  though  they  may  be  too  low  from  a  railroad  stand- 
point. They  are  as  near  equitable  as  we  can  demonstrate  by  means 
of  the  data  available.  We  herewith  respectfully  submit  a  concrete 
bill,  so  correlated  that  it  should  be  adopted  in  its  entirety.  The  elim- 
ination of  any  of  its  features,  or  modifications  of  same,  will  in  our 
opinion  materially  affect  the  benefits  incident  to  the  adoption  of  the 
bill  as  a  whole." 

COMMITTEE  BILL. 

A    BILL    Authorizing  and  directing  the  Postmaster  General  to  re- 
adjust the  compensation  of  steam  railroad  companies 
for  the  transportation  of  mail. 

SECTION  1.  From  January  first,  nineteen  hundred  and  fifteen, 
or  from  an  earlier  date  if  practicable,  the  Postmaster  General  is 
authorized  and  directed  to  readjust  the  compensation  to  be  paid  steam 
railroad  companies  for  the  transportation  of  mail  on  passenger  trains, 
mixed  trains,  mail  trains,  or  cabooses  of  freight  trains,  and  for  services 
connected  therewith  at  the  rates  hereinafter  named:  Provided,  That 
where  two  or  more  railroads  have  varying  distances  between  the 
same  points,  the  compensation  for  the  longer  distances  may  be  reduced 

41 


to  that  of  the  shortest  distance  by  mutual  agreement  between  the 
Postmaster  General  and  the  railroad  companies. 

SEC.  2.  The  Postmaster  General  may  authorize  mail  service 
of  the  following  five  classes,  namely:  Full  railway  post-office  car 
service,  apartment  railway  post-office  car  service,  storage-car  service, 
closed-pouch  service,  and  side  and  transfer  service. 

Full  railway  post-office  cars  and  storage  cars  shall  be  of  a  standard 
length  of  sixty  feet,  inside  measurement:  Provided,  That  thirty  or 
fifteen  feet  of  space  may  be  authorized  for  the  round  trip  in  baggage 
cars,  at  the  respective  rates  hereinafter  named  for  thirty  or  fifteen-foot 
apartment  cars.  Apartment  cars  shall  be  of  two  standard  lengths, 
namely,  thirty  feet  and  fifteen  feet,  inside  measurements.  Closed- 
pouch  mail  service  shall  be  the  transportation  of  mail  in  pouches,  bags, 
or  hampers  in  custody  of  railroad  employees  on  trains  on  which  no 
full  railway  post-office  cars  or  apartment  cars  are  authorized.  Closed- 
pouch  service  may  be  authorized  in  units  of  three  linear  feet  or  seven 
linear  feet,  inside  measurements:  Provided,  That  not  more  than 
seven  linear  feet  of  space  shall  be  authorized  on  any  one  train  at  the 
rates  hereinafter  specified  for  closed-pouch  service.  Side  and  transfer 
service  shall  be  the  transportation  of  mail  between  railroad  stations 
and  post  ofiices  supplied  therefrom  and  between  railroad  stations. 

Authorizations  of  railway  post-office  cars,  apartment  cars,  and 
storage  cars  herein  provided  for  shall  be  for  the  round  trip  of  the  car 
and  the  maximum  space  authorized  in  one  direction  shall  be  determina- 
tive of  the  space  to  be  paid  for  in  the  opposite  direction,  unless  other- 
wise agreed  upon  between  the  Postmaster  General  and  the  railroad 
company  in  any  particular  case:  Provided,  That  authorizations  may 
be  changed  only  at  points  where  the  switching  of  cars  into  or  out 
of  trains  would  not  delay  the  running  of  such  trains:  and  Provided 
further.  That  not  more  than  one  apartment  car  shall  be  authorized  on 
any  one  train.  Authorizations  for  mail  service  under  this  Act  may 
be  made  upon  any  passenger  or  mixed  train  scheduled  for  public  use, 
or  upon  the  caboose  of  any  freight  train,  and  fast-mail  trains  may 
be  contracted  for  at  rates  not  exceeding  those  hereinafter  named. 

SEC.  3.  Service  by  railway  post-oflBce,  apartment,  and  storage 
cars  shall  include  the  carriage  therein  of  all  mail  matter,  equipment, 
and  supplies  for  the  mail  service:  Provided,  That  the  Postmaster 
General  is  authorized  to  return  to  the  mail,  when  practicable  for  the 
utilization  of  car  space  paid  for  and  not  needed  for  the  mails,  postal 
cards,  stamped  envelopes,  newspaper  wrappers,  empty  mail  bags, 
equipment,  and  other  supplies  of  the  postal  service.  The  rates  fixed 
by  this  Act  shall  also  cover  the  transportation  of  persons  who  are  dis- 
charging official  duties  in  connection  with  the  Railway  Mail  Service. 

42 


Such  persons  shall  include  clerks  handling  mail  in  cars,  clerks  traveling 
from  their  homes  to  the  beginning  of  a  mail  run  to  which  they  have 
been  assigned  or  to  their  homes  from  such  mail  run,  and  all  other  per- 
sons while  discharging  official  duties  as  inspectors  or  supervisors  of  the 
Railway  Mail  Service  or  in  any  other  manner  assigned  to  duty  in  the 
administration  of  such  service. 

The  rates  provided  for  herein  shall  further  cover  expenses  of 
delivering  within  and  receiving  mails  at  car  doors  and  the  switching, 
lighting,  heating,  furnishing  of  suitable  drinking  water,  and  cleaning  of 
mail  cars.  Railroad  companies  carrying  the  mails  shall  furnish  reason- 
able facilities  for  caring  for  and  handling  them  while  in  their  custody. 
They  shall  furnish  all  cars  or  parts  of  cars  used  in  the  transportation 
and  distribution  of  the  mails,  except  as  herein  otherwise  provided,  and 
place  them  in  stations  before  the  departure  of  trains  at  and  for  such 
reasonable  time  as  the  department  may  require.  They  shall  also  pro- 
vide reasonable  station  space  and  rooms  for  handling  and  transfer  of 
mails  in  transit,  and  for  offices  and  rooms  for  the  employes  of  the  Postal 
Service  engaged  in  such  transportation,  when  required  by  the  Post- 
master General. 

SEC.  4.  Standard  specifications  shall  be  prepared  by  the  Post- 
master General  for  the  construction  and  fittings  of  full  railway  post- 
office  cars,  thirty-foot  apartment  cars,  fifteen-foot  apartment  cars, 
and  storage  cars,  and  the  rates  herein  named  shall  apply  only  to  cars 
constructed  and  fitted  in  accordance  with  such  standards:  Provided, 
That  whenever  a  railroad  company  is  unable  to  furnish  standard 
cars  or  apartments  of  the  length  requested,  the  Postmaster  General 
may  accept  cars  of  lesser  length  if  sufficient  for  the  needs  of 
the  service,  and  pay  only  for  the  actual  space  furnished,  the  com- 
pensation to  be  a  pro  rata  of  that  provided  for  by  this  Act  for  the 
standard  lengths  requested:  and  Provided  further,  That  the  Post- 
master General  may  accept  cars  and  apartments  of  greater  length 
than  those  of  the  standard  requested,  but  no  compensation  shall 
be  allowed  for  such  excess  lengths. 

SEC.  5.  The  rates  of  payment  for  the  services  authorized  in 
accordance  with  this  Act  shall  be  as  follows,  namely: 

For  full  railway  post-office  car  service,  a  terminal  charge  of  S8.50 
for  each  round  trip,  or  $4.25  for  each  single  trip,  of  a  sixty-foot  car, 
irrespective  of  the  distance  run,  and  in  addition  thereto  a  line  charge 
at  the  rate  of  21  cents  per  mile  run. 

For  thirty-foot  railway  post  office  apartment-car  service,  a  termi- 
nal charge  of  $5.50  for  each  round  trip,  or  $2.75  for  each  single  trip, 
of  a  thirty-foot  apartment  car,  irrespective  of  the  distance  run, 
and  in  addition  thereto  a  line  charge  at  the  rate  of  11  cents  per  mile  run. 

43 


For  fifteen-foot  railway  post  office  apartment-car  service,  a  termi- 
nal charge  of  $4  for  each  round  trip,  or  $2  for  each  single  trip,  of  a 
fifteen-foot  apartment  car,  irrespective  of  distance  run,  and  in  addition 
thereto  a  line  charge  at  the  rate  of  6  cents  per  mile  run. 

For  closed-pouch  service,  when  a  three-foot  unit  is  authorized,  a 
terminal  charge  of  50  cents  for  a  round  trip,  or  25  cents  for  a  single 
trip,  irrespective  of  the  distance  run,  and  in  addition  thereto  a  line 
charge  at  the  rate  of  13^  cents  per  mile  for  the  authorized  number  of 
miles.  When  a  seven-foot  unit  is  authorized,  a  terminal  charge  of  $1 
for  a  round  trip,  or  50  cents  for  a  single  trip,  irrespective  of  the  dis- 
tance run,  and  in  addition  thereto  a  line  charge  at  the  rate  of  3  cents 
per  mile  for  the  authorized  number  of  miles. 

For  storage-car  service  a  terminal  charge  of  $8.50  for  each  round 
trip,  or  $4.25  for  each  single  trip,  of  a  sixty-foot  car,  irrespective  of  the 
distance  run,  and  in  addition  thereto  a  line  charge  at  the  rate  of  21 
cents  per  mile  run. 

Payment  for  side  and  transfer  service  shall  not  be  covered  by  the 
rates  named  herein. 

The  Postmaster  General  is  authorized  to  provide,  in  his  descretion, 
by  regulation  screen  or  other  wagon,  automobile,  or  mail  messenger 
service  under  existing  law,  or  to  contract  with  the  railroad  company 
or  with  other  persons  for  the  performance  of  such  service  at  the  lowest 
rates  obtainable. 

SEC.  6.  Railroad  companies  whose  railroads  were  constructed 
in  whole  or  in  part  by  a  land  grant  made  by  Congress  on  condition  that 
the  mail  should  be  transported  over  their  roads  at  such  price  as  Con- 
gress should  by  law  direct  shall  receive  only  eightj"-  per  centum  of  the 
compensation  which  would  otherwise  be  authorized  by  this  Act. 

SEC.  7.  After  the  rates  specified  in  this  Act  shall  have  been  in 
effect  for  a  period  of  two  j'^ears,  the  Interstate  Commerce  Commission 
shall,  whenever  requested  by  the  Postmaster  General  or  by  the  repre- 
sentatives of  railroads  with  an  aggregate  mileage  of  at  least  twenty- 
five  per  centum  of  the  mileage  of  railroads  carrying  mail,  make  an 
investigation  of  the  justice  and  reasonableness  of  rates  then  in  effect, 
grant  hearings  to  parties  in  interest,  and  report  to  Congress  at  the 
earliest  practicable  date  thereafter  the  results  of  such  investigation, 
making  specific  findings  as  to  whether  the  rates  fixed  herein  should  be 
increased  or  decreased,  and  if  either,  how  much.  Such  report  shall 
show  for  each  steam  railroad  operating  company,  if  practicable,  the 
amount  of  mail  service  rendered,  the  cost  of  performing  same,  and  a 
comparison  of  the  earnings  of  such  railroad  company  from  mail  traffic 
with  those  from  express  traffic  and  other  passenger-train  traffic.     For 

44 


the  purpose  of  such  investigations  the  Interstate  Commerce  Com- 
mission shall  have  all  powers  which  it  is  now  authorized  to  exercise  in 
the  investigation  of  the  reasonableness  of  rates,  and  the  Postmaster 
General  shall  supply  such  information  regarding  the  mail  service  as 
may  be  requested  by  the  Interstate  Commerce  Commission. 

SEC.  8.  All  laws  or  parts  of  laws  prescribing  fines  on  railroad 
companies  for  failing  or  refusing  to  perform  mail  service  and  furnishing 
facilities  therefor  when  required  by  the  Postmaster  General  are  con- 
tinued in  force  and  made  applicable  to  this  Act. 

Railroad  companies  carrying  the  mails  shall  submit  under  oath, 
when  and  in  such  forms  as  may  be  required  by  the  Postmaster  General, 
evidence  as  to  the  performance  of  service. 

SEC.  9.  It  shall  be  unlawful  for  any  railroad  company  to  refuse 
to  perform  mail  service  at  the  rates  of  compensation  specified  in  this 
Act  when  required  by  the  Postmaster  General  so  to  do,  and  for  every 
such  offense  it  shall  be  fined  not  exceeding  $5,000.  Each  day  of  refusal 
shall  constitute  a  separate  offense. 

SEC.  10.  All  laws  or  parts  of  laws  in  conflict  with  the  provisions 
of  this  Act  are  hereby  repealed.  The  unexpended  balances  of  the 
appropriations  for  inland  transportation  by  railroad  routes  and  for 
railway  post-office  car  service  by  Act  of  March  ninth,  nineteen  hundred 
and  fourteen,  making  appropriations  for  the  service  of  the  Post  Office 
Department  for  the  fiscal  year  ending  June  thirtieth,  nineteen  hundred 
and  fifteen,  and  for  other  purposes,  are  hereby  made  available  for  the 
purposes  of  this  Act. 


45 


EXHIBIT  D 

A  COPY   OF  THE  BILL  RECOMMENDED   BY   THE   POST 

OFFICE   DEPARTMENT,    KNOWN    AS   THE 

MOON  BILL,  OR  MOON  RIDER. 

(Reprint  from  H.  R.  19906  63rd  Congress,  3rd  Session.) 

SEC.  10.  That  the  Postmaster  General  is  authorized  and  di- 
rected to  readjust  the  compensation  to  be  paid  to  railroad  companies 
from  and  after  the  thirtieth  day  of  June,  nineteen  hundred  and  fifteen, 
or  as  soon  thereafter  as  may  be  practicable,  for  the  transportation  and 
handling  of  the  mails  and  furnishing  facilities  and  services  in  connection 
therewith  upon  the  conditions  and  at  the  rates  hereinafter  provided. 

The  Postmaster  General  may  state  railroad  mail  routes  and 
authorize  mail  service  thereon  of  the  following  four  classes,  namely: 
Full  railway  post-office  car  service,  apartment  railway  post-office  car 
service,  storage-car  service,  and  closed-pouch  service. 

Full  railway  post-office  car  mail  service  shall  be  service  by  cars 
forty  feet  or  more  in  length,  constructed,  fitted  up,  and  maintained 
for  the  distribution  of  mails  on  trains.  The  authorizations  of  full 
railway  post-office  cars  shall  be  for  standard-sized  cars  sixty  feet  in 
length,  inside  measurement,  except  as  hereinafter  provided. 

Apartment  railway  post-office  car  mail  service  shall  be  service  by 
apartments  less  than  forty  feet  in  length  in  cars  constructed,  fitted  up, 
and  maintained  for  the  distribution  of  mails  on  trains.  Two  standard 
sizes  of  apartment  railway  post-office  cars  may  be  authorized  and  paid 
for,  namely,  apartments  fifteen  feet  and  thirty  feet  in  length,  inside 
measurement,  except  as  hereinafter  provided. 

Storage-car  mail  service  shall  be  service  by  cars  used  for  the  stor- 
lige  and  carriage  of  mails  in  transit  other  than  by  full  and  apartment 
railway  post-office  cars.  The  authorizations  for  storage  cars  shall  be 
lor  cars  sixty  feet  in  length,  inside  measurement,  except  as  hereinafter 
provided :  Provided,  That  less  than  sixty  feet  of  storage  space  may  be 
authorized  in  baggage  cars. 

Service  by  full  and  apartment  railway  post-office  cars  and  storage 
ears  shall  include  the  carriage  therein  of  all  mail  matter,  equipment, 
and  supplies  for  the  mail  service  and  the  employees  of  the  Postal  Serv- 
ice or  Post  Office  Department  as  shall  be  directed  by  the  Postmaster 
General  to  be  so  carried. 

46 


Closed-pouch  mail  service  shall  be  the  transportation  and  handling 
by  railroad  employees  of  mails  on  trains  on  which  full  or  apartment 
railway  post-office  cars  are  not  authorized,  except  as  hereinbefore 
provided. 

The  rates  of  payment  for  the  services  authorized  in  accordance 
with  this  act  shall  be  as  follows,  namely: 

For  full  railway  post-office  car  mail  service  at  not  exceeding  21 
cents  for  each  mile  of  service  by  a  sixty-foot  car. 

In  addition  thereto  he  may  allow  not  exceeding  $2  as  an  initial 
rate  and  the  same  as  a  terminal  rate  for  each  one-way  trip  of  a  sixty- 
foot  car. 

For  apartment  railway  post-office  car  mail  service  at  not  exceeding 
10^  cents  for  each  mile  of  service  by  a  thirty-foot  apartment  car  and 
5^  cents  for  each  mile  of  service  by  a  fifteen-foot  apartment  car. 

In  addition  thereto  he  may  allow  not  exceeding  $1  as  an  initial 
rate  and  the  same  as  a  terminal  rate  for  each  one-way  trip  of  a  thirty- 
foot  apartment  car  and  50  cents  as  an  initial  rate  and  the  same  as  a 
terminal  rate  for  each  one-way  trip  of  a  fifteen-foot  apartment  car. 

For  storage-car  mail  service  at  not  exceeding  20  cents  for  each 
mile  of  service  by  a  sixty-foot  car. 

In  addition  thereto  he  may  allow  not  exceeding  $2  as  an  initial 
rate  and  the  same  as  a  terminal  rate  for  each  one-way  trip  of  a  sixty- 
foot  car. 

Where  authorizations  are  made  for  cars  of  the  standard  lengths 
of  sixty,  thirty,  and  fifteen  feet,  as  provided  by  this  Act,  and  the  rail- 
road company  is  unable  to  furnish  such  cars  of  the  length  authorized, 
but  furnishes  cars  of  lesser  length  than  those  authorized,  but  which 
are  determined  by  the  department  to  be  sufficient  for  the  service,  the 
Postmaster  General  may  accept  the  same  and  pay  only  for  the  actual 
space  furnished  and  used,  the  compensation  to  be  not  exceeding  pro 
rata  of  that  provided  by  this  Act  for  the  standard  length  so  authorized : 
Provided,  That  the  Postmaster  General  may  accept  cars  and  apart- 
ments of  greater  length  than  those  of  the  standard  requested,  but  no 
compensation  shall  be  allowed  for  such  excess  lengths. 

For  closed-pouch  service,  on  routes  upon  which  closed-pouch  serv- 
ice only  is  performed,  at  not  exceeding  the  rates  of  compensation  pro- 
vided by  existing  law  for  average  daily  weights  of  mail  carried  over  the 
whole  route;  on  routes  upon  which  apartment  railway  post-office  car 
and  closed-pouch  services  are  performed,  at  not  exceeding  $20  per 
mile  per  annum  for  each  two  thousand  pounds  average  daily  weight 
of  mails  carried,  and  at  pro  rata  of  such  rate  of  compensation  for  each 

47 


one  hundred  pounds  of  average  daily  weight  greater  or  less  than  two 
thousand  pounds;  and  on  routes  upon  which  full  railway  post-oflBice 
car  and  closed-pouch  services  or  full  railway  post-office  car,  apartment- 
car,  and  closed-pouch  services  are  performed,  at  not  exceeding  $19  per 
mile  per  annum  for  each  two  thousand  pounds  average  daily  weight  of 
mails  carried,  and  at  pro  rata  of  such  rate  of  compensation  for  each  one 
hundred  pounds  of  average  daily  weight  greater  or  less  than  two  thou- 
sand pounds,  the  average  daily  weights  to  be  ascertained  in  every  case 
by  the  actual  weighing  of  the  mails. 

The  Postmaster  General  may  require  railroad  companies  carrying 
the  mails  to  deliver  them  into  and  take  them  from  the  terminal  and 
intermediate  post  offices  and  transfer  them  between  railroad  stations 
on  their  routes  without  additional  compensation,  under  such  regu- 
lations as  he  may  deem  proper,  in  cases  where  he  does  not  provide  for 
such  service  otherwise:  Provided,  That  the  Postmaster  General  in  his 
discretion  may  relieve  any  of  the  roads  of  such  service. 

Railroad  companies  whose  railroads  were  constructed  in  whole  or 
in  part  by  a  land  grant  made  by  Congress,  on  the  condition  that  the 
mails  should  be  transported  over  their  roads  at  such  price  as  Congress 
should  by  law  direct,  shall  receive  only  eighty  per  centum  of  the  com- 
pensation otherwise  authorized  by  this  act. 

The  initial  and  terminal  rates  provided  for  herein  shall  cover  ex- 
penses of  loading  and  unloading  mails,  switching,  lighting,  heating, 
cleaning  mail  cars,  and  all  other  expenses  incidental  to  station  service 
and  required  by  the  Postmaster  General  in  connection  with  the  mails 
that  are  not  included  in  the  car-mile  rate.  The  allowance  for  full 
railway  post-office  cars,  apartment  railway  post-office  cars,  and  storage 
cars  may  be  varied  in  accordance  with  the  approximate  difference  in 
their  respective  cost  of  construction  and  maintenance. 

For  the  purpose  of  ascertaining  the  average  weight  of  closed-pouch 
mails  per  day  upon  which  to  adjust  compensation,  the  Postmaster 
General  is  authorized  and  directed  to  have  such  mails  carried  on  the 
several  routes  weighed  by  the  employees  of  the  Post  Office  Depart- 
ment for  such  a  number  of  successive  days,  not  less  than  thirty-five, 
at  such  times  after  the  passage  of  this  Act,  as  he  may  direct,  and  not 
less  frequently  than  once  in  every  year  thereafter,  the  result  to  be 
stated  and  certified  in  such  form  and  manner  as  he  may  direct.  In 
computing  the  average  weight  of  mails  per  day  carried  on  a  railroad 
route,  the  whole  number  of  days  included  in  the  weighing  period  shall 
be  used  as  a  divisor.  The  expense  of  taking  the  weights  of  mails  and 
the  compensation  to  tabulators  and  clerks  employed  in  connection 
with  the  weighings,  for  assistance  in  completing  computations,  and 
of  rentals,  if  necessary,  in  Washington,  District  of  Columbia,  shall  be 

48 


paid  out  of  the  appropriation  fur  inland   transportation  by  railroad 
routes. 

In  computing  the  car  miles  of  the  full  railway  post-ofl&ce  cars  and 
apartment  railway  post-office  cars,  the  maximum  space  authorized  in 
either  direction  of  a  round-trip  car  run  shall  be  regarded  as  the  space 
to  be  computed  in  both  directions,  unless  otherwise  mutually  agreed 
upon. 

In  computing  the  car  miles  of  storage  cars,  the  maximum  space 
authorized  in  either  direction  of  a  round-trip  car  run  shall  be  regarded 
as  the  space  to  be  computed  in  both  directions,  unless  the  car  be  used 
by  the  company  in  the  return  movement,  or  otherwise  mutually 
agreed    upon. 

New  service  and  additional  service  may  be  authorized  at  not  ex- 
ceeding the  rates  herein  provided,  and  service  may  be  reduced  or 
discontinued  with  pro  rata  reductions  in  pay,  as  the  needs  of  the  Postal 
Service  may  require:  Provided,  That  no  additional  pay  shall  be 
allowed  for  additional  closed-pouch  service  on  established  routes  until 
the  next  regular  readjustment  of  pay  therefor  on  such  routes,  and  no 
additional  pay  shall  be  allowed  for  additional  car  service  unless  specif- 
ically authorized  by  the  Postmaster  General. 

All  cars  or  parts  of  cars  used  for  the  railway  mail  service  shall  be 
of  such  construction,  style,  length,  and  character,  and  furnished  in 
such  manner  as  shall  be  required  by  the  Postmaster  General,  and  shall 
be  constructed,  fitted  up,  maintained,  heated,  lighted,  and  cleaned  by 
and  at  the  expense  of  the  railroad  companies.  No  pay  shall  be  allowed 
for  service  by  any  railway  post-office  car  which  is  not  sound  in  material 
and  construction  and  which  is  not  equipped  with  sanitary  drinking- 
water  containers  and  toilet  facilities,  nor  unless  such  car  is  regularly 
and  thoroughly  cleaned.  No  pay  shall  be  allowed  for  service  by  any 
wooden  full  railway  post-office  car  unless  constructed  substantially  in 
accordance  with  the  most  approved  plans  and  specifications  of  the 
Post  Office  Department  for  such  type  of  cars,  nor  for  service  by  any 
wooden  full  railway  post-office  car  run  in  any  train  between  adjoining 
steel  cars,  or  between  the  engine  and  a  steel  car  adjoining.  After  the 
first  of  July,  nineteen  hundred  and  seventeen,  the  Postmaster  General 
shall  not  approve  or  allow  to  be  used,  or  pay  for  service  by,  any  full 
railway  post-office  car  not  constructed  of  steel  or  steel  underframe  or 
equally  indestructible  material,  and  not  less  than  twenty-five  per 
centum  of  the  full  railway  post-ofiice  cars  of  a  railway  company  not 
conforming  to  these  provisions  on  August  twenty-fourth,  nineteen 
hundred  and  twelve,  shall  be  replaced  with  cars  constructed  of  steel 
annually  after  June,  nineteen  hundred  and  thirteen;  and  all  full  rail- 
way post-oflBice  cars  accepted  for  this  service  and  contracted  for  by  the 

49 


railroad  companies  hereafter  shall  be  constructed  of  steel.  Until  July 
first,  nineteen  hundred  and  seventeen,  in  cases  of  emergency  and  in 
cases  where  the  necessities  of  the  service  require  it,  the  Postmaster 
General  may  provide  for  service  by  full  railway  post-office  cars  of  other 
than  steel  or  steel  underframe  construction,  and  fix  therefor  such  rat© 
of  compensation  within  the  maximum  herein  provided  as  shall  give 
consideration  to  the  inferior  character  of  construction,  and  the  railroad 
companies  shall  furnish  service  by  such  cars  at  such  rates  so  fixed. 

Service  over  property  owned  or  controlled  by  another  company 
or  a  terminal  company  shall  be  considered  service  of  the  railroad  com- 
pany using  such  property  and  not  that  of  the  other  or  terminal  com- 
pany: Provided,  That  service  over  a  land-grant  road  shall  be  paid 
for  as  herein  provided. 

Railroad  companies  carrying  the  mails  shall  furnish  all  necessary 
facilities  for  caring  for  and  handling  them  while  in  their  custody.  They 
shall  furnish  all  cars  or  parts  of  cars  used  in  the  transportation  and 
distribution  of  the  mails,  except  as  is  herein  otherwise  provided,  and 
place  them  in  stations  before  the  departure  of  trains  at  such  times  and 
when  required  to  do  so.  They  shall  provide  station  space  and  rooms 
for  handling,  distribution,  and  transfer  of  mails  in  transit,  and  for 
offices  and  rooms  for  the  employees  of  the  Postal  Service  engaged  in 
such  transportation,  when  required  by  the  Postmaster  General. 

Every  railroad  company  carrying  the  mails  shall  carry  on  any 
train  it  operates  and  without  extra  charge  therefor  the  persons  in 
charge  of  the  mails,  and  when  on  duty  and  traveling  to  and  from  duty, 
and  all  duly  accredited  agents  and  officers  of  the  Post  Office  Depart- 
ment and  the  Postal  Service,  while  traveling  on  ofl&cial  business,  upon 
the  exhibition  of  their  credentials. 

If  any  railroad  company  carrying  the  mails  shall  fail  or  refuse  to 
provide  cars  or  apartments  in  cars  for  distribution  purposes  when  re- 
quired by  the  Postmaster  General,  or  shall  fail  or  refuse  to  construct, 
fit  up,  maintain,  heat,  light,  and  clean  such  cars  and  provide  such 
appliances  for  use  in  case  of  accident  as  may  be  required  by  the  Post- 
master General,  it  shall  be  fined  such  reasonable  sum  as  may,  in  the 
discretion  of  the  Postmaster  General,  be  deemed  proper. 

The  Postmaster  General  shall  in  all  cases  decide  upon  what  trains 
and  in  what  manner  the  mails  shall  be  conveyed.  Every  railroad 
company  carrying  the  mails  shall  carry  on  any  train  it  operates  and 
with  due  speed  all  mailable  matter,  equipment,  and  supplies  directed 
to  be  carried  thereon.  If  any  such  railroad  company  shall  fail  or  refuse 
to  transport  the  mails,  equipment,  and  supplies  when  required  by  the 
Postmaster  General  on  any  train  or  trains  it  operates,  such  company 

50 


shall  be  fined  such  reasonable  amount  as  may,  in  the  discretion  of  the 
Postmaster  General,  be  deemed  proper. 

The  Postmaster  General  may  make  deductions  from  the  pay  of 
railroad  companies  carrying  the  mails  under  the  provisions  of  this  Act 
for  reduction  in  service  or  in  frequency  of  service  where,  in  his  judg- 
ment, the  importance  of  the  facilities  withdrawn  or  reduced  requires 
it,  and  impose  fines  upon  them  for  delinquencies.  He  may  deduct  the 
price  of  the  value  of  the  service  in  cases  where  it  is  not  performed,  and 
not  exceeding  three  times  its  value  if  the  failure  be  occasioned  by  the 
fault  of  the  railroad  company. 

The  provisions  of  this  section  shall  apply  to  service  operated  by 
railroad  companies  partly  by  railroad  and  partly  by  steamboats. 

The  provisions  of  this  section  respecting  the  rates  of  compensation 
shall  not  apply  to  mails  conveyed  under  special  arrangement  in  freight 
trains,  for  which  rates  not  exceeding  the  usual  and  just  freight  rates 
may  be  paid,  in  accordance  with  the  classifications  and  tariffs  approved 
by  the  Interstate  Commerce  Commission. 

Railroad  companies  carrying  the  mails  shall  submit,  under  oath, 
when,  and  in  such  form  as  may  be  required  by  the  Postmaster  General, 
evidence  as  to  the  performance  of  service. 

The  Postmaster  General  is  authorized  to  employ  such  clerical  and 
other  assistance  as  shall  be  necessary  to  carry  out  the  provisions  of  this 
section,  and  to  rent  quarters  in  Washington,  District  of  Columbia,  if 
necessary,  for  the  clerical  force  engaged  thereon,  and  to  pay  for  the 
same  out  of  the  appropriation  for  inland  transportation  by  railroad 
routes,  and  hereafter  detailed  estimates  shall  be  submitted  for  such 
services  in  the  annual  Book  of  Estimates. 

The  Postmaster  General  shall,  from  time  to  time,  request  informa- 
tion from  the  Interstate  Commerce  Commission  as  to  the  revenue 
received  by  railroad  companies  from  express  companies  for  services 
rendered  in  the  transportation  of  express  matter,  and  may,  in  his 
discretion,  arrange  for  the  transportation  of  mail  matter  other  than  of 
the  first  class  at  rates  not  exceeding  those  so  ascertained  and  reported 
to  him,  and  it  shall  be  the  duty  of  the  railroad  companies  to  carry  such 
mail  matter  at  such  rates  fixed  by  the  Postmaster  General. 

The  Postmaster  General  is  authorized,  in  his  discretion,  to  petition 
the  Interstate  Commerce  Commission  for  the  determination  of  a  postal 
carload  or  less-than-carload  rate  for  transportation  of  mail  matter  of 
the  fourth  class  and  periodicals,  and  may  provide  for  and  authorize 
such  transportation,  when  practicable,  at  such  rates,  and  it  shall  be  the 
duty  of  the  railroad  companies  to  provide  and  perform  such  service  at 
such  rates  and  on  the  conditions  prescribed  by  the  Postmaster  General. 

51 


The  Postmaster  General  may,  in  his  discretion,  distinguish  be- 
tween the  several  classes  of  mail  matter  and  provide  for  less  frequent 
dispatches  of  mail  matter  of  the  third  and  fourth  classes  and  period- 
icals, when  lower  rates  for  transportation  or  other  economies  may  be 
secured  thereby  without  material  detriment  to  the  service. 

The  Postmaster  General  is  authorized  to  return  to  the  mails,  when 
practicable  for  the  utilization  of  car  space  paid  for  and  not  needed  for 
the  mails,  postal  cards,  stamped  envelopes,  newspaper  wrappers,  empty 
mail  bags,  furniture,  equipment,  and  other  supplies  for  the  Postal 
Service. 

The  Postmaster  General,  in  cases  of  emergency  between  October 
first  and  April  first  of  any  year,  maj'^  hereafter  return  to  the  mails 
empty  mail  bags  and  other  equipment  theretofore  withdrawn  there- 
from as  required  by  law,  and  where  such  return  requires  additional 
authorization  of  car  space  under  the  provisions  of  this  section  to  pay 
for  the  transportation  thereof  as  provided  for  herein  out  of  the  appro- 
priation for  inland  transportation  by  railroad  routes. 

The  Postmaster  General  may  have  the  weights  of  mail  taken  on 
railroad  mail  routes  and  computations  of  the  average  loads  of  the  sev- 
eral classes  of  cars  and  other  computations  for  statistical  and  admin- 
istrative purposes  made  at  such  times  as  he  may  elect,  and  pay  the 
expense  thereof  out  of  the  appropriation  for  inland  transportation  by 
railroad  routes. 

It  shall  be  unlawful  for  any  railroad  company  to  refuse  to  perform 
mail  service  at  the  rates  of  compensation  provided  by  law  when  and 
for  the  period  required  by  the  Postmaster  General  so  to  do,  and  for 
every  such  offense  it  shall  be  fined  not  exceeding  $5,000. 

That  the  appropriations  for  inland  transportation  by  railroad 
routes  and  for  railway  post-office  car  service  for  the  fiscal  year  ending 
June  thirtieth,  nineteen  hundred  and  sixteen,  are  hereby  made  avail- 
able for  the  purposes  of  this  section. 

SEC.  11.  That  on  account  of  the  increased  weight  of  mails  re- 
sulting from  Postmaster  General's  order  numbered  seventy-three 
hundred  and  forty-nine,  of  July  twenty-fifth,  nineteen  hundred  and 
thirteen,  respecting  rates  upon  and  limit  cf  weight  of  parcel-post  pack- 
ages in  the  local,  first,  and  second  zones,  and  effective  from  August 
fifteenth,  nineteen  hundred  and  thirteen,  the  Postmaster  General  is 
authorized  to  add  to  the  compensation  paid  for  transportation  on 
railroad  routes  on  and  after  August  fifteenth,  nineteen  hundred  and 
thirteen,  for  the  remainder  of  the  contract  terms,  not  exceeding  one- 
half  of  one  per  centum  thereof  per  annum. 

52 


SEC.  12.  That  on  account  of  the  increased  weight  of  mails  re- 
sulting from  Postmaster  General's  orders  numbered  seventy-seven 
hundred  and  twenty  and  seventy-seven  hundred  and  twenty-one,  of 
December  eighteenth,  nineteen  hundred  and  thirteen,  respecting  rates 
upon  and  limit  of  weight  of  parcel-post  packages,  and  admitting  books 
to  the  parcel-post  classification,  the  Postmaster  General  is  authorized 
to  add  to  the  compensation  paid  for  transportation  on  railroad  routes 
on  and  after  January  first,  nineteen  hundred  and  fourteen,  for  the 
remainder  of  the  contract  terms,  not  exceeding  one  per  centum  thereof 
per  annum. 


53 


EXHIBIT  E 

A  COPY  OF  THE  MOON,  OR  POST  OFFICE  DEPARTMENT, 

BILL  AS  FINALLY  AGREED  TO  IN  CONFERENCE  ON 

THE  NIGHT  OF  MARCH  3,  1915,  BUT  WHICH 

BILL  FAILED  TO  PASS. 

(Extract  from  Congressional  Record  March  15,  1915,  Page  6581.) 

SEC.  10.  That  the  Postmaster  General  is  authorized  and  di- 
rected to  readjust  the  compensation  to  be  paid  to  railroad  companies 
from  and  after  the  30th  day  of  June,  1915,  or  as  soon  thereafter  as  may 
be  practicable,  for  the  transportation  and  handling  of  the  mails  and 
furnishing  facilities  and  services  in  connection  therewith  upon  the 
conditions  and  at  the  rates  hereinafter  provided. 

The  Postmaster  General  may  state  railroad  mail  routes  and 
authorize  mail  service  thereon  of  the  following  four  classes,  namely: 
Full  railway  post-office  car  service,  apartment  railway  post-office  car 
service,  storage-car  service,  and  closed-pouch  service. 

Full  railway  post-office  car  mail  service  shall  be  service  by  cars 
40  feet  or  more  in  length,  constructed,  fitted  up,  and  maintained  for 
the  distribution  of  mails  on  trains.  The  authorizations  of  full  railway 
post-office  cars  shall  be  for  standard-sized  cars  60  feet  in  length,  inside 
measurement,  except  as  hereinafter  provided. 

Apartment  railway  post-office  car  mail  service  shall  be  service  by 
apartments  less  than  40  feet  in  length  in  cars  constructed,  fitted  up, 
and  maintained  for  the  distribution  of  mails  on  trains.  Two  standard 
sizes  of  apartment  railway  post-office  cars  may  be  authorized  and  paid 
for,  namely,  apartments  15  feet  and  30  feet  in  length,  inside  measure- 
ment, except  as  hereinafter  provided. 

Storage-car  mail  service  shall  be  service  by  cars  used  for  the 
storage  and  carriage  of  mails  in  transit  other  than  by  full  and  apart- 
ment railway  post-office  cars.  The  authorizations  for  storage  cars 
shall  be  for  cars  60  feet  in  length,  inside  measurement,  except  as  here- 
inafter provided:  Provided,  That  less  than  60  feet  of  storage  space 
may  be  authorized  in  baggage  cars. 

Service  by  full  and  apartment  railway  post-office  cars  and  storage 
cars  shall  include  the  carriage  therein  of  all  mail  matter,  equipment, 
and  supplies  for  the  mail  service  and  the  employes  of  the  Postal  Service 
or  Post  Office  Department  as  shall  be  directed  by  the  Postmaster 
General  to  be  so  carried. 


54 


Closed-pouch  mail  service  shall  be  the  transportation  and  handling 
by  railroad  employes  of  mails  on  trains  on  which  full  or  apartment 
railway  post-office  cars  are  not  authorized,  except  as  hereinbefore 
provided. 

The  rates  of  payment  for  the  services  authorized  in  accordance 
with  this  Act  shall  be  as  follows,  namely : 

For  full  railway  post-office  car  mail  service  at  not  exceeding  21 
cents  for  each  mile  of  service  by  a  60-foot  car. 

In  additon  thereto  he  may  allow  not  exceeding  $2  as  an  initial 
rate  and  the  same  as  a  terminal  rate  for  each  one-way  trip  of  a  60-foot 
car. 

For  apartment  railway  post-office  car  mail  service  at  not  exceeding 
11  cents  for  each  mile  of  service  by  a  30-foot  apartment  car  and  6  cents 
for  each  mile  of  service  by  a  15-foot  apartment  car. 

In  addition  thereto  he  may  allow  not  exceeding  $1  as  an  initial 
rate  and  the  same  as  a  terminal  rate  for  each  one-way  trip  of  a  30-foot 
apartment  car  and  50  cents  as  an  initial  rate  and  the  same  as  a  terminal 
rate  for  each  one-way  trip  of  a  15-foot  apartment  car. 

For  storage-car  mail  service  at  not  exceeding  20  cents  for  each 
mile  of  service  by  a  60-foot  car. 

In  addition  thereto  he  may  allow  not  exceeding  $2  as  an  initial 
rate  and  the  same  as  a  terminal  rate  for  each  one-way  trip  of  a  60-foot 
car. 

Where  authorizations  are  made  for  cars  of  the  standard  lengths 
of  60,  30,  and  15  feet,  as  provided  by  this  Act,  and  the  railroad  com- 
pany is  unable  to  furnish  such  cars  of  the  length  authorized,  but 
furnishes  cars  of  lesser  length  than  those  authorized,  but  which  are 
determined  by  the  department  to  be  sufficient  for  the  service,  the 
Postmaster  General  may  accept  the  same  and  pay  only  for  the  actual 
space  furnished  and  used,  the  compensation  to  be  not  exceeding  pro 
rata  of  that  provided  by  this  Act  for  the  standard  length  so  authorized : 
Provided,  That  the  Postmaster  General  may  accept  cars  and  apart- 
ments of  greater  length  than  those  of  the  standard  requested,  but  no 
compensation  shall  be  allowed  for  such  excess  lengths. 

For  closed-pouch  service,  on  routes  upon  which  closed-pouch 
service  only  is  performed,  at  not  exceeding  the  rates  of  compensation, 
provided  by  existing  law  for  average  daily  w'eights  of  mail  carried  over 
the  whole  route;  on  routes  upon  which  apartment  railway  post-office 
car  and  closed-pouch  services  are  performed,  at  not  exceeding  $20  per 
mile  per  annum  for  each  2,000  pounds  average  daily  weight  of  mails 
carried,  and  at  pro  rata  of  such  rate  of  compensation  for  each  100 

55 


pounds  of  average  daily  weight  greater  or  less  than  2,000  pounds;  and 
on  routes  upon  which  full  railway  post-office  car  and  closed-pouch 
services  or  full  railway  post-office  car,  apartment-car,  and  closed-pouch 
services  are  performed,  at  not  exceeding  $19  per  mile  per  annum  for 
each  2,000  pounds  average  daily  weight  of  mails  carried,  and  at  pro 
rata  of  such  rate  of  compensation  for  each  100  pounds  of  average  daily 
weight  greater  or  less  than  2,000  pounds,  the  average  daily  weights 
to  be  ascertained  in  every  case  by  the  actual  weighing  of  the  mails. 

The  Postmaster  General  may  require  railroad  companies  carrying 
the  mails  to  deliver  them  into  and  take  them  from  the  terminal  and 
intermediate  post  offices  and  transfer  them  between  railroad  stations 
on  their  routes  without  additional  compensation,  under  such  regu- 
lations as  he  may  deem  proper,  in  cases  where  he  does  not  provide  for 
such  service  otherwise:  Provided,  That  the  Postmaster  General  in 
his  discretion  may  relieve  any  of  the  roads  of  such  service. 

Railroad  companies  whose  railroads  were  constructed  in  whole  or 
in  part  by  a  land  grant  made  by  Congress,  on  the  condition  that  the 
mails  should  be  transported  over  their  roads  at  such  price  as  Congress 
should  by  law  direct,  shall  receive  only  80  per  cent  of  the  compensation 
otherwise  authorized  by  this  Act. 

The  initial  and  terminal  rates  provided  for  herein  shall  cover  ex- 
penses of  loading  and  unloading  mails,  switching,  lighting,  heating, 
cleaning  mail  cars,  and  all  other  expenses  incidental  to  station  service 
and  required  by  the  Postmaster  General  in  connection  with  the  mails 
that  are  not  included  in  the  car-mile  rate.  The  allowance  for  full 
railway  post-office  cars,  apartment  railway  post-office  cars,  and  storage 
cars  may  be  varied  in  accordance  with  the  approximate  difference  in 
their  respective  cost  of  construction  and  maintenance. 

For  the  purpose  of  ascertaining  the  average  weight  of  closed-pouch 
mails  per  day  upon  which  to  adjust  compensation,  the  Postmaster 
General  is  authorized  and  directed  to  have  such  mails  carried  on  the 
several  routes  weighed  by  the  emploj-es  of  the  Post  Office  Department 
for  such  a  number  of  successive  days,  not  less  than  35,  at  such  times 
after  the  passage  of  this  Act,  as  he  may  direct,  and  not  less  frequently 
than  once  in  every  year  thereafter,  the  result  to  be  stated  and  certified 
in  such  form  and  manner  as  he  may  direct.  In  computing  the  average 
weight  of  mails  per  day  carried  on  a  railroad  route,  the  whole  number  of 
days  included  in  the  weighing  period  shall  be  used  as  a  divisor.  The 
expense  of  taking  the  weights  of  mails  and  the  compensation  to  tabu- 
lators and  clerks  employed  in  connection  with  the  weighings,  for 
assistance  in  completing  computations,  and  of  rentals,  if  necessary,  in 
Washington,  D.  C,  shall  be  paid  out  of  the  appropriation  for  inland 
transportation  by  railroad  routes. 

56 


In  computing  the  car  miles  of  the  full  railway  post-office  cars  and 
apartment  railway  post-office  cars,  the  maximum  space  authorized  in 
either  direction  of  a  round-trip  car  run  shall  be  regarded  as  the  space 
to  be  computed  in  both  directions,  unless  otherwise  mutually  agreed 
upon. 

In  computing  the  car  miles  of  storage  cars,  the  maximum  space 
authorized  in  cither  direction  of  a  round-trip  car  run  shall  be  regarded 
as  the  space  to  be  computed  in  both  directions,  unless  the  car  be  used 
by  the  company  in  the  return  movement,  or  otherwise  mutually 
agreed  upon. 

New  service  and  additional  service  may  be  authorized  at  not  ex- 
ceeding the  rates  herein  provided,  and  service  may  be  reduced  or  dis- 
continued with  pro  rata  reductions  in  pay,  as  the  needs  of  the  Postal 
Service  may  require:  Provided,  That  no  additional  pay  shall  be 
allowed  for  additional  closed-pouch  service  on  established  routes  until 
the  next  regular  readjustment  of  pay  therefor  on  such  routes,  and  no 
additional  pay  shall  be  allowed  for  additional  car  service  unless  specif- 
ically authorized  by  the  Postmaster  General. 

All  cars  or  parts  of  cars  used  for  the  Railway  Mail  Service  shall  be 
of  such  construction,  style,  length,  and  character,  and  furnished  in 
such  manner  as  shall  be  required  by  the  Postmaster  General,  and 
shall  be  constructed,  fitted  up,  maintained,  heated,  lighted,  and  cleaned 
by  and  at  the  expense  of  the  railroad  companies.  No  pay  shall  be 
allowed  for  service  by  any  railway  post-office  car  which  is  not  sound 
in  material  and  construction  and  which  is  not  equipped  with  sani- 
tary drinking-water  containers  and  toilet  facilities,  nor  unless  such 
car  is  regularly  and  thoroughly  cleaned.  No  pay  shall  be  allowed 
for  service  by  any  wooden  full  railway  post-office  car  unless  con- 
structed substantially  in  accordance  with  the  most  approved  plans  and 
specifications  of  the  Post  Office  Department  for  such  type  of  cars,  nor 
for  service  by  any  wooden  full  railway  post-office  car  run  in  any  train 
between  adjoining  steel  cars,  or  between  the  engine  and  a  steel  car 
adjoining.  After  the  1st  of  July,  1917,  the  Postmaster  General  shall 
not  approve  or  allow  to  be  used,  or  pay  for  service  by,  any  full  railway 
post-office  car  not  constructed  of  steel  or  steel  underfrarae  or  equally 
indestructible  material,  and  not  less  than  25  per  cent  of  the  full  railway 
post-office  cars  of  a  railway  company  not  conforming  to  these  provis- 
ions on  August  24,  1912,  shall  be  replaced  with  cars  constructed  of 
steel  annually  after  June,  1913;  and  all  full  railwaj'  post-office  cars 
accepted  for  this  service  and  contracted  for  by  the  railroad  companies 
hereafter  shall  be  constructed  of  steel.  Until  July  1,  1917,  in  cases 
of  emergency  and  in  cases  where  the  necessities  of  the  service  require 
it,  the  Postmaster  General  may  provide  for  service  by  full  railway 

57 


post-oflBce  cars  of  other  than  steel  or  steel  underframe  construction,  and 
fix  therefor  such  rate  of  compensation  within  the  maximum  herein 
provided  as  shall  give  consideration  to  the  inferior  character  of  con- 
struction, and  the  railroad  companies  shall  furnish  service  by  such  care 
at  such  rates  so  fixed. 

Service  over  property  owned  or  controlled  by  another  company 
or  a  terminal  company  shall  be  considered  service  of  the  railroad  com- 
pany using  such  property  and  not  that  of  the  other  or  terminal  com- 
pany: Provided,  That  service  over  a  land-grant  road  shall  be  paid 
for  as  herein  provided. 

Railroad  companies  carrying  the  mails  shall  furnish  all  necessary 
facilities  for  caring  for  and  handling  them  while  in  their  custody.  They 
shall  furnish  all  cars  or  parts  of  cars  used  in  the  transportation  and 
distribution  of  the  mails,  except  as  is  herein  otherwise  provided,  and 
place  them  in  stations  before  the  departure  of  trains  at  such  times  and 
when  required  to  do  so.  They  shall  provide  station  space  and  rooms 
for  handling,  distribution,  and  transfer  of  mails  in  transit,  and  for 
offices  and  rooms  for  the  employes  of  the  Postal  Service  engaged  in 
such  transportation,  when  required  by  the  Postmaster  General. 

Every  railroad  company  carrying  the  mails  shall  carry  on  any 
train  it  operates  and  without  extra  charge  therefor  the  persons  in 
charge  of  the  mails,  and  when  on  duty  and  traveling  to  and  from  duty, 
and  all  duly  accredited  agents  and  officers  of  the  Post  Office  Depart- 
ment and  the  Postal  Service,  while  traveling  on  official  business,  upon 
the  exhibition  of  their  credentials. 

If  any  railroad  company  carrying  the  mails  shall  fail  or  refuse  to 
provide  cars  or  apartments  in  cars  for  distribution  purposes  when  re- 
quired by  the  Postmaster  General,  or  shall  fail  or  refuse  to  construct, 
fit  up,  maintain,  heat,  light,  and  clean  such  cars  and  provide  such 
appliances  for  use  in  case  of  accident  as  may  be  required  by  the  Post- 
master General,  it  shall  be  fined  such  reasonable  sum  as  may,  in  the 
discretion  of  the  Postmaster  General,  be  deemed  proper. 

The  Postmaster  General  shall  in  all  cases  decide  upon  what  trains 
and  in  what  manner  the  mails  shall  be  conveyed.  Every  railroad 
company  carrying  the  mails  shall  carry  on  any  train  it  operates  and 
with  due  speed  all  mailable  matter,  equipment,  and  supplies  directed 
to  be  carried  thereon.  If  any  such  railroad  company  shall  fail  or 
refuse  to  transport  the  mails,  equipment,  and  supplies  when  required 
by  the  Postmaster  General  on  any  train  or  trains  it  operates,  such 
company  shall  be  fined  such  reasonable  amount  as  may,  in  the  dis- 
cretion of  the  Postmaster  General,  be  deemed  proper. 

58 


The  Postmaster  General  may  make  deductions  from  the  pay  of 
railroad  companies  carrying  the  mails  under  the  provisions  of  this  Act 
for  reduction  in  service  or  in  frequency  of  service  where,  in  his  j  udg- 
ment,  the  importance  of  the  facilities  withdrawn  or  reduced  requires 
it,  and  impose  fines  upon  them  for  delinquencies.  He  may  deduct  the 
price  of  the  value  of  the  service  in  cases  where  it  is  not  performed,  and 
not  exceeding  three  times  its  value  if  the  failure  be  occasioned  by 
the  fault  of  the  railroad  company. 

The  provisions  of  this  section  shall  apply  to  service  operated  by 
railroad  companies  partly  by  railroad  and  partly  by  steamboats. 

The  provisions  of  this  section  respecting  the  rates  of  compensation 
shall  not  apply  to  mails  conveyed  under  special  arrangement  in  freight 
trains,  for  which  rates  not  exceeding  the  usual  and  just  freight  rates 
may  be  paid,  in  accordance  with  the  classifications  and  tariffs  approved 
by  the  Interstate  Commerce  Commission. 

Railroad  companies  carrying  the  mails  shall  submit,  under  oath, 
when,  and  in  such  form  as  may  be  required  by  the  Postmaster  General, 
evidence  as  to  the  performance  of  service. 

The  Postmaster  General  is  authorized  to  employ  such  clerical  and 
other  assistance  as  shall  be  necessary  to  carry  out  the  provisions  of 
this  section,  and  to  rent  quarters  in  Washington,  D.  C,  if  necessary, 
for  the  clerical  force  engaged  thereon,  and  to  pay  for  the  same  out  of 
the  appropriation  for  inland  transportation  by  railroad  routes,  and 
hereafter  detailed  estimates  shall  be  submitted  for  such  services  in  the 
annual  Book  of  Estimates. 

The  Postmaster  General  shall,  from  time  to  time,  request  infor- 
mation from  the  Interstate  Commerce  Commission  as  to  the  revenue 
received  by  railroad  companies  from  express  companies  for  services 
rendered  in  the  transportation  of  express  matter,  and  may,  in  his  dis- 
cretion, arrange  for  the  transportation  of  mail  matter  other  than  of  the 
first  class  at  rates  not  exceeding  those  so  ascertained  and  reported  to 
him,  and  it  shall  be  the  duty  of  the  railroad  companies  to  carry  such 
mail  matter  at  such  rates  fixed  by  the  Postmaster  General. 

The  Postmaster  General  is  authorized,  in  his  discretion,  to  petition 
the  Interstate  Commerce  Commission  for  the  determination  of  a 
postal  carload  or  less-than-carload  rate  for  transportation  of  mail 
matter  of  the  fourth  class  and  periodicals,  and  may  provide  for  and 
authorize  such  transportation,  when  practicable,  at  such  rates,  and 
it  shall  be  the  duty  of  the  railroad  companies  to  provide  and  perform 
such  service  at  such  rates  and  on  the  conditions  prescribed  by  the 
Postmaster  General. 

59 


The  Postmaster  General  may,  in  his  discretion,  distinguish  be- 
tween the  several  classes  of  mail  matter  and  provide  for  less  frequent 
dispatches  of  mail  matter  of  the  third  and  fourth  classes  and  period- 
icals, when  lower  rates  for  transportation  or  other  economies  may  be 
secured  thereby  without  material  detriment  to  the  service. 

The  Postmaster  General  is  authorized  to  return  to  the  mails,  when 
practicable  for  the  utilization  of  car  space  paid  for  and  not  needed  for 
the  mails,  postal  cards,  stamped  envelopes,  newspaper  wrappers, 
empty  mail  bags,  furniture,  equipment,  and  other  supplies  for  the 
Postal  Service. 

The  Postmaster  General,  in  cases  of  emergency  between  October 
1  and  April  1  of  any  year,  may  hereafter  return  to  the  mails  empty 
mail  bags  and  other  equipment  theretofore  withdrawn  therefrom  as 
required  by  law,  and  where  such  return  requires  additional  authori- 
zation of  car  space  under  the  provisions  of  this  section  to  pay  for  the 
transportation  thereof  as  provided  for  herein  out  of  the  appropriation 
for  inland  transportation  by  railroad  routes. 

The  Postmaster  General  may  have  the  weights  of  mail  taken  on 
railroad  mail  routes  and  computations  of  the  average  loads  of  the 
several  classes  of  cars  and  other  computations  for  statistical  and  ad- 
ministrative purposes  made  at  such  times  as  he  may  elect,  and  pay 
the  expense  thereof  out  of  the  appropriation  for  inland  transportation 
by  railroad  routes. 

It  shall  be  unlawful  for  any  railroad  company  to  refuse  to  perform 
mail  service  at  the  rates  of  compensation  provided  by  law  when  and 
for  the  period  required  by  the  Postmaster  General  so  to  do,  and  for 
every  such  offense  it  shall  be  fined  not  exceeding  $5,000. 

That  the  appropriations  for  inland  transportation  by  railroad 
routes  and  for  railway  post-office  car  service  for  the  fiscal  year  ending 
June  30,  1916,  are  hereby  made  available  for  the  purposes  of  this 
section. 

That  after  the  rates  specified  in  this  Act  shall  have  been  in  effect 
for  a  period  of  one  year,  the  Interstate  Commerce  Commission  shall, 
whenever  requested  by  the  Postmaster  General  or  by  the  represent- 
atives of  railroads  with  an  aggregate  mileage  of  at  least  51  per  cent  of 
the  mileage  of  railroads  carrying  mail,  make  an  investigation  of  the 
justice  and  reasonableness  of  rates  then  in  effect,  grant  hearings  to 
parties  in  interest,  and  report  to  Congress  at  the  earliest  practicable 
date  thereafter  the  results  of  such  investigation,  making  specific  find- 
ings as  to  whether  the  rates  fixed  herein  should  be  increased  or  de- 
creased and  if  either,  how  much:  Provided  further.  That  such 
investigations  thereafter  shall  not  be   made   more   frequently   than 

60 


biennially.  Such  report  shall  show  for  each  steam  railroad  operating 
company  if  practicable,  the  amount  of  mail  service  rendered,  the  cost 
of  performing  same,  and  a  comparison  of  the  earnings  of  such  railroad 
company  from  mail  traffic  with  those  from  express  traffic  and  other 
passenger-train  traffic.  For  the  purposes  of  such  investigations  the 
Interstate  Commerce  Commission  shall  have  all  powers  which  it  is 
now  authorized  to  exercise  in  the  investigation  of  the  reasonableness 
of  rates,  and  the  Postmaster  General  shall  supply  such  information 
regarding  the  mail  service  as  may  be  requested  by  the  Interstate  Com- 
merce Commission:  Provided  further,  That  the  Postmaster  General 
may,  in  his  discretion,  make  independent  investigations  and  reports. 


Comments  Upon  the  Foregoing  Bill 

The  Moon,  or  Departmental,  bill  purports  to  be  a 
measure  through  which  Congress  would,  by  law,  establish  a 
system  of  paying  the  railroads  for  carrying  the  mails.  Upon 
examination,  however,  it  will  be  seen  that  the  passage  of 
this  bill  would  really  delegate  that  authority  almost  v/holly 
to  the  Postmaster  General,  and  that  Congress,  itself,  would 
be  enacting  only  two  specific  provisions,  namely : 

1.  That  the  Postmaster  General  must  not  pay 
the  railroads  more  than  certain  rates. 

2.  That  the  railroads  must  carry  the  mails. 

All  other  matters,  including  the  character,  quality  and 
extent  of  the  service  to  be  rendered,  the  manner  of  rendering 
it  and  the  rates  to  be  paid  therefor  (within  the  specified  limi- 
tations) are  left  to  the  personal  discretion  of  the  Postmaster 
General. 

There  are  seven  distinct  ways  in  which  the  Moon  bill 
would  permit  the  Postmaster  General  to  vary  the  compen- 
sation of  the  railroads  for  mail  transportation. 

1.  He  could  make  the  car-mile  rates  for  mail 
cars  and  apartments  whatever  he  chose,  "not 
exceeding"  the  rates  named  in  the  bill. 

2.  He  could,  at  his  option,  vary  the  initial 
and  terminal  rates  to  any  extent,  "not  exceeding" 
the  rates  specified  in  the  bill. 

3.  He  could,  at  his  discretion,  require  any  rail- 

61 


road  to  perform,  without  additional  pay,  or  could, 
without  reduction  of  pay,  exempt  any  railroad 
from,  the  services  usually  known  as  "  side,  transfer 
and  terminal  messenger  services." 

4.  He  could  vary,  to  whatever  extent  his  per- 
sonal judgment  dictated,  the  initial  and  terminal 
rates  for  mail  cars  and  apartments,  to  correspond 
with  differences  in  the  cost  of  construction  and 
maintenance. 

5.  He  could  require  the  railroads  to  carry  the 
mails,  other  than  first  class,  at  the  rates  received 
for  handling  express  matter,  in  those  cases  where 
express  revenues  are  the  lower,  without  being 
obliged  to  pay  the  express  rates  in  the  cases  where 
they  are  higher  than  the  mail  rates.  Thus  he  would 
be  permitted  to  ignore  the  essential  differences  be- 
tween the  m.ail  and  express  services. 

6.  He  could  petition  the  Interstate  Commerce 
Commission  for  carload  and  less-than-carload  rates 
for  fourth-class  matter,  and  substitute  such  rates  for 
the  mail  rates. 

7.  He  could,  at  his  discretion,  arrange  "less 
frequent  dispatches"  for  third-  and  fourth-class 
mail,  and  pay  lower  rates  than  those  allowed  for 
first-  and  second-class  mail. 

«   «   «   » 

In  addition,  the  Post  Office  appropriation  bill,  to  which 
the  Moon  bill  was  attached  as  a  rider,  contained  a  section 
repealing  the  Act  of  August  24,  1912,  by  which  Congress 
had  forbidden  the  extension  of  the  "Blue  Tag"  order.  This 
order,  issued  by  the  Post  Office  Department,  and  effective 
September  1,  1911,  transferred  certain  periodicals  and  maga- 
zines from  the  mails  to  freight  in  the  Third  Contract  Section, 
and,  effective  July  1,  1912,  in  the  Second  Contract  Section. 
Repeal  of  the  Act  of  August  24,  1912,  would  have  permitted 
the  Postmaster  General  to  extend  this  practice  to  the  other 
two  mail  contract  sections  of  the  country  and  would  have 
provided  an  eighth  way  in  which  he  could,  in  his  personal 

62 


discretion,  vary  the  payments  to  the  railroads  for  carrying 
the  mails,  and  the  character  of  the  service  required. 

It  should  be  noted  that  neither  the  Moon  rider,  nor  any 
other  section  of  the  appropriation  bill,  contained  any  provision 
requiring  the  rates  paid  the  railroads  to  be  uniform  or  rea- 
sonable, and  that  the  wide  liberty  of  action  which  its  passage 
would  have  vested  in  the  Postmaster  General  could  be  ex- 
ercised, as  far  as  the  terms  of  this  proposed  law  are  con- 
cerned, in  such  a  manner  as  to  discriminate,  to  almost  any 
extent,  between  different  railroad  companies,  by  paying  dis- 
similar rates  for  the  same  service,  or  by  requiring  different 
qualities  of  service  at  the  same  rates. 

Under  the  terms  of  such  a  law  it  would  be  impossible 
for  the  management  of  any  railroad  to  know  even  approxi- 
mately what  revenue  it  might  count  upon  receiving  from 
mail  transportation. 


63 


VI 

Chronology  of  the  Laws,  Practices 

and  Inquiries  Affecting 

Railway  Mail  Pay 

1838,  July  7.     Congress  enacted  the   first   law  regulating  the 

pay  for  carrying  mail  on  railroads.  This  law  provided 
that  the  pay  should  not  exceed  25  per  cent,  more  than 
similar  service  would  cost  in  stage  coaches. 

1839,  January  25.     Law  enacted  limiting  the  pay  to  $300  per 

mile  per  annum. 

1845,  March  3.  The  rates  for  mail  pay  were  divided  into  three 
classes,  paying  respectively  $300,  $100  and  $50  per  mile 
per  annum,  and  these  rates,  as  fixed  by  the  Act  of  1845, 
continued  in  effect  until  June  30,  1873. 

1873,  March  3.  Enactment  of  law  (still  in  effect)  fixing  the 
method  of  paying  railroad  companies  for  mail  trans- 
portation according  to  the  average  daily  weight  of  mail 
carried,  with  a  descending  scale  of  rates;  also  providing 
a  supplementary  rate  on  routes  where  whole  cars  were 
used  as  traveling  post  offices. 

1875,  March  3.     Law  enacted  requiring  the  Postmaster  General 

to  have  the  mails  weighed,  stated  and  verified  by  employes 
of  the  Post  Office  Department  in  a  manner  just  to  the 
Post  Office  Department  and  the  railroad  companies,  and 
to  pay  the  expenses  of  such  weighing  out  of  the  appro- 
priation for  railway  mail  transportation. 

1876,  July  12.     Law  passed  reducing  rates  for  mail  transportation 

10  per  cent. 

1878,  April.  The  Hubbard  Commission  (appointed  by  Con- 
gress) reported  in  favor  of  a  new  method  of  paying  rail- 
road companies,  based  on  space  limited  by  the  average 
weight  carried. 

1878,  June,  17.  Law  passed  reducing  rates  for  mail  transpor- 
tation 5  per  cent. 

64 


1879,  March  3.  Law  enacted  providing  that  "The  Post- 
master General  shall  request  all  railroad  companies  trans- 
porting the  mails  to  furnish,  under  seal,  such  data  relating 
to  the  operating,  receipts,  and  expenditures  of  such  roads 
as  may,  in  his  judgment,  be  deemed  necessary  to  enable 
him  to  ascertain  the  cost  of  mail  transportation  and  the 
proper  compensation  to  be  paid  for  the  same;  and  he  shall, 
in  his  annual  report  to  Congress,  make  such  recom- 
mendations, founded  on  the  information  obtained  under 
this  section,  as  shall  in  his  opinion  be  just  and  equitable." 

1883,  March  3.  Law  enacted  requiring  Postmaster  General 
to  make  thorough  investigation  into  the  railway  mail 
service  and  report  a  more  complete  system  of  gauging 
the  rates  of  pay  for  carrying  the  mails  on  railroad  routes. 

1883,  December  3.  Postmaster  General  reported  to  Congress 
the  findings  of  the  Elmer,  Thompson  and  Slater  Com- 
mission, proposing  a  new  method  of  paying  the  railroad 
companies  based  on  weight  and  space.  (This  report  was 
regarded  by  the  Post  Office  Department  as  in  some 
measure  a  compliance  with  the  law  of  March  3,  1879.) 

1898,  January  13.  Law  enacted  appointing  a  Joint  Commission 
of  the  House  and  Senate  for  the  investigation  of  railway 
mail  pay  and  other  postal  subjects. 

1901,  January  14.  This  Joint  Commission  (the  Wolcott-Loud 
Commission)  reported  to  Congress,  stating  substantially 
that  the  railroads  were  not  overpaid  for  their  mail  trans- 
portation or  postal-car  service. 

1905,  March  3.     Law  enacted  requiring  the  mails  to  be  weighed 

for  not  less  than  90  successive  "working  days,"  instead 
of  for  30  days,  as  required  by  the  law  of  1873. 

1906,  December  1.     Postmaster  General  Cortelyou,  in  his  an- 

nual report,  stated  that  forms  of  inquiry  were  being 
prepared  so  as  to  request  railroad  companies  to  furnish 
information  in  response  to  the  law  of  March  3,  1879. 

1907,  March  2.     Law  enacted  reducing  pay  of  railroad  com- 

panies for  mail  transportation  5  per  cent,  on  all  weights 
over  5000  and  up  to  48,000  pounds,  and  10  per  cent,  on 


65 


all  weights  over  48,000  pounds ;  also  reducing  postal-car 
pay  87/3  per  cent,  for  45-foot  cars,  18^  per  cent,  for  50- 
foot  cars,  and  20  per  cent,  for  cars  of  55  feet  or  over. 
1907,  June  7.  The  Postmaster  General  issued  an  order  chang- 
ing the  divisor  used  in  computing  the  average  daily 
weight  of  mails  carried,  and  causing  a  reduction  of  one- 
seventh  (14=  per  cent.).  The  pay  of  each  railroad  was 
correspondingly  affected. 

1909,  December  1.  Postmaster  General  Hitchcock,  in  his 
annual  report,  announced  that  railroad  companies  had 
been  requested  to  furnish  the  Department  with  com- 
prehensive data  as  to  cost,  etc.,  as  per  law  of  March 
3,  1879.      This  to  cover  the  month  of  November,  1909. 

1911,  August  12.  Postmaster  General  Hitchcock  transmitted 
to  the  62d  Congress,  in  Document  No.  105,  the  results 
of  the  inquiry  of  November,  1909,  holding,  substan- 
tially, that  the  railroads  were  overpaid  $9,000,000  per 
year. 

1911,  September  1.     Post  Office  Department,  by  "Blue  Tag'* 

order,  transferred  certain  periodicals  and  magazines  from 
the  mails  to  freight  in  the  Third  Contract  Section.  This 
order  was  extended  to  the  Second  Contract  Section, 
effective  July  1,  1912. 

1912,  August  24.     Joint  Congressional  Committee  on  Railway 

Mail  Pay  appointed. 

1912,  August  24.  Congress  enacted  a  law  establishing  the 
parcel  post;  further  extension  of  the  **Blue  Tag"  order 
prohibited;  Postmaster  General  authorized,  at  his  discre- 
tion, to  readjust  pay  if  mail  be  diverted  from  one  route 
to  another  to  the  extent  of  not  less  than  10  per  cent,  of 
the  weight  on  either  route ;  such  diversion  to  be  ascer- 
tained by  a  weighing  of  the  mails  conducted  for  such 
period  as  the  Postmaster  General,  in  his  judgment,  shall 
deem  to  be  sufficient. 

1913,  January  1.     Parcel  post  service  inaugurated,  with  weight 

limit  of  eleven  pounds,  corresponding  to  the  international 
parcel  post. 


66 


1913,  January  28.  Hearings  commenced  before  Joint  Con- 
gressional Conmiittee. 

1913,  March  4.  Congress  enacted  a  law  authorizing  the  Post- 
master General,  in  his  discretion,  to  grant  to  railroads  on 
which  the  mails  were  not  weighed  in  1913  an  increase  in 
mail  pay  not  exceeding  5  per  cent.,  as  compensation  for 
carrying  the  parcel  post;  such  allowance  to  be  effective 
from  July  1,  1913,  until  the  next  quadrennial  adjustment 
of  pay. 

1913,  August  15.     Weight  limit  of  the  parcel  post  increased  by 

order  of  the  Postmaster  General  to  20  pounds  in  the  local, 
1st  and  2d  zones ;  postage  rates  reduced  in  the  same  zones. 

1914,  January  1.     Weight  limit  of  the  parcel  post  increased  to 

50  pounds  in  the  local,  1st  and  2d  zones,  and  to  20  pounds 
in  the  3d  to  8th  zones;  postage  rates  reduced  in  the  3d 
to  6th  zones. 

1914,  March  16.  Books  and  catalogues  admitted  to  the  parcel 
post. 

1914,  April  3.  Hearings  before  Joint  Congressional  Com- 
mittee closed. 

1914,  June  4.  Moon  bill  introduced  in  the  House  of  Repre- 
sentatives. The  bill  was  passed  by  the  House,  sent  to 
the  Senate  and  referred  to  the  Senate  Post  Office  Com- 
mittee. 

1914,  August  31.  The  Joint  Congressional  Committee  sub- 
mitted its  report,  refuting  the  charge  of  overpayment 
and  holding  the  railroads,  on  the  contrary,  entitled  to 
more  liberal  compensation. 

1914,  August  31.  Joint  Congressional  Committee  bill  intro- 
duced in  Senate  and  referred  to  Post  Office  Committee. 

1914,  December  14.  House  Post  Office  Committee  made 
Moon  bill  a  rider  on  Post  Office  appropriation  bill,  and 
also  provided,  in  the  appropriation  bill  for  a  repeal  of 
the  Act  of  August  24,  1912,  prohibiting  the  further  ex- 
tension of  the  **Blue  Tag"  order. 

1915,  March  4.     Post  Office  appropriation  bill  and  Moon  rider 

failed  of  passage  on  last  day  of  session.  Congress 
adjourned  without  having  enacted  any  railway  mail  pay 
legislation. 


67 


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